Lower rate will apply to new employees after July 4
By Wendy Leung Staff Writer
Created: 06/16/2011 08:54:45 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.”

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