Canan Tasci, Staff Writer
Created: 05/20/2010 09:49:15 PM PDT
MONTCLAIR – City Council members unanimously approved a two-tier pension program that will reduce the retirement benefit for non-safety employees hired after June 20.
The city’s retirement rate and annual costs will decrease as a result of the contract amendment with the California Public Employees’ Retirement System that was approved at Monday’s council meeting. The change does not affect police officers and firefighters.
Current city employees and any hired before June 20 are covered under the 3 percent at 60 retirement plan. Those hired on or after that date will be covered under the 2 percent at 60 retirement plan.
That means they will be eligible for retirement at age 60, and would receive a retirement payment of 2 percent of their final salary times the number of years worked for the city.
“What this contract is saying is that for our employees who have been with us is that we value you and we’re honoring our commitment to them,” Councilman Bill Ruh said.
“But fiscally, we’re looking at new hires and something that is fiscally prudent. We’re going to give you benefits at this rate, because we as the city need to do that.”
The agreement with San Bernardino Public Employees Association and the city’s management employees provides a two-tier retirement program.
Keeping up with pension payments was a problem in the past, so the city developed a tiered-pension system in 2005 for its public safety employees in order to save costs down the road.
“I’m unaware of other cities that are doing this,” Ruh said.
The tiered approach is unusual because not many cities have taken an aggressive posture to decrease their retirement system, said Ed Starr, Montclair’s acting city manager.
“It’s difficult to do because most bargaining groups are resistant to the change, because they feel it will weaken their ability to recruit qualified candidates,” he said.
But Ruh said that’s not the case.
“We have a lot of qualified applicants for public safety. I don’t think this is diminishing us or them in any way,” he said.
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