Item 10BCity of Southlake, Texas
MEMORANDUM
August 10, 2004
TO: Billy Campbell, City Manager
FROM: Kevin Hugman, Director of Human Resources
SUBJECT: Approval of a contract with Canada Life /Jefferson Pilot for employee Long term
Disability (LTD) benefits
Action Requested: City Council approval of a contract with Canada Life /Jefferson Pilot for
employee long term disability, effective October 1, 2004 with guaranteed rates
through September 30, 2005.
Background
Information: In May 2002, the City bid out the various employee insurance and benefits
programs. These programs included medical, dental, group life insurance
(including accidental death and dismemberment, life, and long -term disability)
and section 125 plan. Canada Life was chosen as the low bid for long term
disability benefits from twelve (12) bids received. A contract was approved by
City Council in August 2002 for a 24 -month rate guarantee.
Canada Life has completed its renewal analysis for the City and has offered a
contract renewal for twelve (12) months with no rate increase. The City's
premium is based on employee annual budgeted salary.
During the past year, Canada Life was acquired by Jefferson Pilot Financial
Insurance Company. Jefferson Pilot has over $32 billion in assets and a
financial rating of A ++ (Superior) from A.M. Best Company. There has been
no disruption of service and no reduction in benefits.
Financial
Considerations: The rate renewal offered by Canada Life /Jefferson Pilot is the same rate as the
previous two years: $0.26 / $100 which results in an approximate monthly cost
to the City of $2,310, or a total approximate annual cost of $27,720.
The proposed LTD insurance benefit costs are within the amounts budgeted in
the proposed FY 2004 -2005 Budget.
Citizen Input/
Board Review: Not Applicable.
Legal Review: Not Applicable.
Alternatives: Input as desired by Council.
Supporting
Documents: None
Billy Campbell, City Manager
August 10, 2004
Page 2
Staff
Recommendation: City Council approve renewal of a contract with Canada Life /Jefferson Pilot
for employee long term disability benefits, effective October 1, 2004 with
guaranteed rates through September 30, 2005.