Lower rate to apply to new employees
Wendy Leung, Staff Writer
Created: 06/12/2011 09:32:15 PM PDT
RANCHO CUCAMONGA – The City Council has adopted a two-tier retirement benefits formula that will affect future City Hall employees.
Starting July 4, employees hired by the city will receive a retirement benefits formula of 2 percent at age 55, compared to the current formula of 2.5 percent at 55.
Under the current formula, employees who retire at 55 years old will receive a pension that equals the worker’s highest salary multiplied by 2.5 percent, multiplied by the number of years worked.
Under the formula for new employees, those who retire at 55 will receive a pension that equals the average of the employee’s highest salary in three consecutive years, multiplied by 2 percent multiplied by number of years worked.
“Over the long term, this will save us hundreds of thousands of dollars,” Assistant City Manager John Gillison said. “But to give you an exact number … that depends on how fast people retire. It’s not like we’re going on a hiring spree this year.”
The city expects 20 percent to 40 percent of the work force to turn over in the next five years.
“Everybody is doing what they can to reduce costs in general and personnel costs is a significant part of the budget,” Gillison said. “Whatever can be done, cities are looking to do it.”
To read entire story, click here.