Some 8 cents of every tax dollar spent supporting the municipal general fund goes to help pay for annual pension plan costs.
In the fiscal year that ended June 30, 2009 Manteca was required to pay $2,533,220 into California Public Employee Retirement System accounts set up for the city. That is 7.7 percent of the current $32.8 million general fund budget. However, drops in stock value could bump the city’s costs up this fiscal year as invested assets are no longer generating high returns due to the economy.
Details of the financial impact of the city’s pension plans for public safety and other municipal employees appears in the recently completed 2009-10 fiscal year audit report for the City of Manteca.
The PERS contributions the city must make is considered a wild card every year in the budgeting process since stocks- where most PERS money is invested – have suffered big drops and wild fluctuations. When the value of Manteca’s PERS assets – which was at $56 million in 2007 – drops to the point the interest generated can’t meet the financial obligations Manteca has to retired employees the percentage of the city’s contribution on remaining employees goes up to cover for the shortfall.
Manteca municipal employees hired in the future may have to work longer to qualify for full retirement benefits, pay more into their pension funds, and settle for a somewhat smaller retirement check.
It is part of a proposal cobbled together by the San Joaquin City Managers Group last year in a bid to whittle away at future retirement costs that threaten to drag municipal budgets down for decades to come if left unchanged. The group consists of city managers from Manteca, Lathrop, Ripon, Escalon, Lodi, Tracy, and Stockton as well as the county administrator. The goal was to set a countywide standard to avoid one jurisdiction being played off against another when hiring workers.
Manteca public safety employees – police and firefighters – now get 3 percent of their salary for each year they work up to 20 years and can retire at age 50. On a $100,000 salary the last year they worked they would receive a minimum of $60,000 in their first year of retirement. Additional years of service up to a certain point can increase that minimum retirement payment.
The proposal would change that to 2.5 percent a year and up the minimum retirement age to 55. It would reduce the initial year of minimum retirement benefits to around $50,000 based on a $100,000 annual salary. In addition it would be offset by 50 percent of the Social Security such a retiree may receive where it is provided.
Other municipal employees who are fully invested can retire at age 55 with 2.7 percent of their salary for each year worked. That would drop down to 2 percent under the proposed plan.
The proposal also would take the average of the three highest years to determine the base for retirement. Cost of living increases for retirees would be capped at 3 percent a year while employees would have to contribute at least 5 percent of their salaries to their pension.
Manteca currently pays 26.14 percent of a firefighter or police officer’s salary each year into the Pubic Employee Retirement System (PERS) fund and 16.798 percent of all other employees. The higher rate for public safety employees reflects the fact they are allowed to retire in roughly two thirds the time of other workers due to stress considerations.
That means a firefighter making $100,000 a year the city is paying $126,140 for salary and pension payments before health care insurance is factored into the equation.
The proposal states, “The goal is to provide full career employees with pension benefits that maintain their standard of living into retirement. The benefit levels should be set to be fair and adequate, yet fiscally sustainable for employers and taxpayers.”
It stressed the need for “reciprocity and comparability be guaranteed between local government agencies.” The report also notes, “there was acknowledgment that market conditions of the late ‘90s led to ‘super funding’ causing management and labor to seek increased benefits that have proven to be unsustainable and need to be rolled back to more appropriate levels.”
In the fiscal year that ended June 30, 2009 Manteca was required to pay $2,533,220 into California Public Employee Retirement System accounts set up for the city. That is 7.7 percent of the current $32.8 million general fund budget. However, drops in stock value could bump the city’s costs up this fiscal year as invested assets are no longer generating high returns due to the economy.
Details of the financial impact of the city’s pension plans for public safety and other municipal employees appears in the recently completed 2009-10 fiscal year audit report for the City of Manteca.
The PERS contributions the city must make is considered a wild card every year in the budgeting process since stocks- where most PERS money is invested – have suffered big drops and wild fluctuations. When the value of Manteca’s PERS assets – which was at $56 million in 2007 – drops to the point the interest generated can’t meet the financial obligations Manteca has to retired employees the percentage of the city’s contribution on remaining employees goes up to cover for the shortfall.
Manteca municipal employees hired in the future may have to work longer to qualify for full retirement benefits, pay more into their pension funds, and settle for a somewhat smaller retirement check.
It is part of a proposal cobbled together by the San Joaquin City Managers Group last year in a bid to whittle away at future retirement costs that threaten to drag municipal budgets down for decades to come if left unchanged. The group consists of city managers from Manteca, Lathrop, Ripon, Escalon, Lodi, Tracy, and Stockton as well as the county administrator. The goal was to set a countywide standard to avoid one jurisdiction being played off against another when hiring workers.
Manteca public safety employees – police and firefighters – now get 3 percent of their salary for each year they work up to 20 years and can retire at age 50. On a $100,000 salary the last year they worked they would receive a minimum of $60,000 in their first year of retirement. Additional years of service up to a certain point can increase that minimum retirement payment.
The proposal would change that to 2.5 percent a year and up the minimum retirement age to 55. It would reduce the initial year of minimum retirement benefits to around $50,000 based on a $100,000 annual salary. In addition it would be offset by 50 percent of the Social Security such a retiree may receive where it is provided.
Other municipal employees who are fully invested can retire at age 55 with 2.7 percent of their salary for each year worked. That would drop down to 2 percent under the proposed plan.
The proposal also would take the average of the three highest years to determine the base for retirement. Cost of living increases for retirees would be capped at 3 percent a year while employees would have to contribute at least 5 percent of their salaries to their pension.
Manteca currently pays 26.14 percent of a firefighter or police officer’s salary each year into the Pubic Employee Retirement System (PERS) fund and 16.798 percent of all other employees. The higher rate for public safety employees reflects the fact they are allowed to retire in roughly two thirds the time of other workers due to stress considerations.
That means a firefighter making $100,000 a year the city is paying $126,140 for salary and pension payments before health care insurance is factored into the equation.
The proposal states, “The goal is to provide full career employees with pension benefits that maintain their standard of living into retirement. The benefit levels should be set to be fair and adequate, yet fiscally sustainable for employers and taxpayers.”
It stressed the need for “reciprocity and comparability be guaranteed between local government agencies.” The report also notes, “there was acknowledgment that market conditions of the late ‘90s led to ‘super funding’ causing management and labor to seek increased benefits that have proven to be unsustainable and need to be rolled back to more appropriate levels.”
