LONG BEACH – Council members are expected to approve a pension reform deal with the city’s largest union today that would save $125.5million over the next 10 years.
Officials consider the agreement with the 3,600-member International Association of Machinists and Aerospace Workers the capstone of a three- year effort to overhaul city pensions.
Members of the union-endorsed contract changes last week that combine increased employee retirement contributions with reduced benefits for future workers.
Current workers will pay 6 percent more of their salaries toward retirement costs, an increase from 2 percent to what is considered a full employee’s share of 8 percent, while continuing to receive 2.5 percent of their pay as pension for each year worked and being able to retire at age 55.
Employees hired after Jan. 1 will contribute 7 percent of pay toward their pensions, receive 2 percent as pension for each year on the job and reach retirement eligibility at age 62.
The union also negotiated an extension of its current contract, to Sept. 30, 2014, and a guarantee that no more of its employees would be laid off this fiscal year.
According to a memorandum, the amendments, which would go into effect Jan. 26, will save Long Beach $2.5 million in its general fund and $7.6 million in all funds for the current fiscal year ending Sept. 30. Next year, the annual savings going forward are estimated at $3.8 million for the general
fund and $11.8 million across all funds.Last year, Long Beach financial planners estimated a $10.9 million general fund deficit for 2014.
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