BREAKING: City Union Says Agreement Reached Over Pension Reform – Government

By Harry Saltzgaver

Executive Editor | 0 comments

Union officials said Wednesday that they had reached an agreement with city management for a contract extention including pension reform.

The International Association of Machinists and Aerospace Workers represents most of the city’s non-public safety employees. The IAM has been at odds with management and Mayor Bob Foster for more than 18 months over pension reform to save the city money. Unions representing police and fire both signed new agreements more than a year ago increasing the amount employees pay into the pension fund, and creating a new tier of benefits for new hires.

Last August, union members rejected a proposal that would have had current employees pay all of the “employee share” of pension payments and create a new with fewer benefits for new hires. Union officials did not endorse that contract extension, because it did not guarantee that there would be no further layoffs and did not stop a contemplated ballot initiative to roll back employee compensation.

This new agreement, explained to the City Council Tuesday night in closed session, extends the contract for one year, to Sept. 30, 2014, and says there will be no more layoffs of IAM employees for this fiscal year.

Other components of the deal include current employees picking up an additional 6% of salary payment to the Public Employees’ Retirement System (PERS), with a total of 8%. The city had been making those payments.

Employees hired after Jan. 1, 2013, would be entitled to a new, lower pension. Retirement with full pension would be available at age 62, with the benefit figured at 2% of a three-year average of salary.

Employees now may retire at age 55 with a pension of 2.5% of their highest salary for every year worked — so a 30-year employee would receive 75% of their final salary as a pension.

New employees would pay slightly less into PERS — 7% of salary — due to the formula required for the lower benefits. Current employees would keep their current benefit package.

Union members still must vote on the agreement to make it official, and the City Council must approve the package, as well. Mayor Foster, who has made pension reform one of his top priorities for more than two years, declined to comment Wednesday afternoon. City Manager Pat West is on vacation. Debbie Mills, Director of Human Resources, said the city would not comment on the agreement at this time.

via BREAKING: City Union Says Agreement Reached Over Pension Reform – Government.

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