Neil Nisperos, Staff Writer
Created: 03/26/2011 07:06:52 AM PDT

CHINO – The City Council last week viewed cost-saving options in reducing pension contributions for all new employees or having employees pay all their pension share.

City Manager Patrick Glover introduced the proposals at a recent informational meeting on municipal employee pensions.

Glover said the city now pays the full share of contribution costs for employees. That contribution to PERS is $6.6 million this year, increasing to $7.7 million next fiscal year.

The council could approve reduced benefits for all new hires, to receive 2.7 percent of the salary at age 55 to 2 percent at age 55 for miscellaneous employees, and 3 percent at 50 to 3 percent at 55 for safety employees. If that happened, the city could save $3 million annually after a 30-year implementation of the plan and an assumed complete staff turnover, Glover said.

“The $3 million on a $7.7 million bill is 40 percent, so over time you would reduce your retirement obligation by 40 percent which is pretty substantial reduction. It just takes 30 years to get there,” Glover said.

“In Year 5, you’re at $500,000 (in savings), and in Year 15 you’re $1.5 million, so it’s a very straight line based on anticipated turnover we would have in staff.”

Glover also raised the prospect of having employees, instead of the city, pay their pension contribution.

“If we were to have all employees to pick up that share, it would be (a first-year) savings of $2 million,” Glover said.

“However, if you put these in place it’s a direct reduction in salary for every employee. If (the council) says OK, we’re going to do half … it’s a 4 percent reduction for all employees immediately, but the savings is also immediate. You’re not waiting to take 30 years to save $3 million.”

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