Manteca municipal employees hired after Jan. 1, 2010 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 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.
It is expected that the proposal will be submitted to elected officials in the various cities in the coming months.
Manteca public safety employees – police and firefighters – now get 3 percent of their salary for each year they work and can retire after 20 years 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.”
The group also came up with pension reform recommendations for the state level that they intend to present during Thursday’s gathering of the Central Valley Division of the League of California Cities meeting Thursday at the River Mill in French Camp.
The recommendations they’d like to see put in place at the state level include:
• establishing a benefit cap for miscellaneous employees and public safety employees at 80 percent.
• create new lower benefit formulas such as 2.7 percent at 60 for public safety employees and 2.7 percent at 65 for miscellaneous employees.
• giving employers flexibility to determine when part-time employees are entitled to pension benefits.
• establish additional reserve funding to reduce volatility.
• retain full disability benefits for those who are injured and cannot work in any capacity but restrict disability payments for those who are able to work (in same or similar job) after work-related injury.
• change the California PERS board membership to achieve better employee/employer balance plus greater public agency representation.
It is part of a proposal cobbled together by the San Joaquin City Managers Group 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.
It is expected that the proposal will be submitted to elected officials in the various cities in the coming months.
Manteca public safety employees – police and firefighters – now get 3 percent of their salary for each year they work and can retire after 20 years 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.”
The group also came up with pension reform recommendations for the state level that they intend to present during Thursday’s gathering of the Central Valley Division of the League of California Cities meeting Thursday at the River Mill in French Camp.
The recommendations they’d like to see put in place at the state level include:
• establishing a benefit cap for miscellaneous employees and public safety employees at 80 percent.
• create new lower benefit formulas such as 2.7 percent at 60 for public safety employees and 2.7 percent at 65 for miscellaneous employees.
• giving employers flexibility to determine when part-time employees are entitled to pension benefits.
• establish additional reserve funding to reduce volatility.
• retain full disability benefits for those who are injured and cannot work in any capacity but restrict disability payments for those who are able to work (in same or similar job) after work-related injury.
• change the California PERS board membership to achieve better employee/employer balance plus greater public agency representation.
