06-18-2003, 01:02 AM #1
City Council approves new retirement plan for firefighter's
By Gene Maddaus
PASADENA -- The City Council on Monday approved an amendment to a contract with the city's firefighters, granting them better retirement benefits.
The new plan will cost the city an extra $940,000 a year. But the plan is not as generous as the one adopted by most cities that operate under the California Public Employee Retirement System (CalPERS).
"There may be employees who leave to go to other agencies with a better benefit package or a higher salary,' said Karyn Ezell, the city's human resources director. "We may have a harder time filling vacancies, as well.'
Ezell said the city cannot afford the more generous option, which was adopted throughout the West San Gabriel Valley two years ago, and which would cost an extra $1.8 million annually.
Councilman Victor Gordo stepped out of the council chambers just before the vote was taken, and was absent for the vote.
He said he needed to talk to a constituent, but didn't say why he opted not to vote.
"I think CalPERS needs to be revamped,' Gordo said after the meeting. "It is a system that is basically sucking money from local government and offering inferior service to public employees.'
The option Ezell negotiated with the city's two firefighters' unions earlier this year is called 3 percent at 55. Firefighters who retire at 55 receive 3 percent of their final salary for each year of service. Thus, a 55- year-old retiree who worked 25 years and finished with a salary of $80,000 would get 75 percent of that amount $60,000 as a pension.
The agreement will replace the old 2 percent at 50 plan, under which the same 55-year-old retiree would get 67.5 percent of his final salary, or $54,000.
A public safety employee at most area cities including Arcadia, Alhambra and Monrovia would get 3 percent at 50. CalPERS introduced it as an option about three years ago and it has quickly become the industry standard. Under that plan, a 50-year-old retiree with 20 years of service would get 60 percent of his salary, compared with just 40 percent under 2 percent at 50 and 48 percent under 3 percent at 55.
Sierra Madre is the only other area city with 3 percent at 55, which goes to the city's police officers.
The Pasadena Firefighters Association is satisfied with the new contract, said Capt. Felipe Niquete.
"We feel good about it, but we'd prefer 3 percent at 50,' Niquete said. "Our original proposal was 3 percent at 50, and hopefully in the future, we can get it.'
Niquete said young firefighters pay more attention to retirement benefits than they used to, which could lead some recruits to work elsewhere.
A negotiation with the city's police unions also has resulted in the 3 percent at 55 plan. The amended police contract has yet to be formally adopted by the City Council.
Niquete said other area cities negotiated their contracts in better fiscal climates, allowing them to adopt a more lucrative retirement plan.
"Our timing was bad,' said Niquete, who is 49. "I got six more years. If we had 3 percent at 50, it would be a lot nicer... You don't want to be 50, 60 years old, climbing hills and fighting fires.'
from the pasadena star news
06-18-2003, 07:39 AM #2
- Join Date
- Jul 1999
- Flanders, NJ
People always bitch about our pensions. I don't know how it is in CA, but in the NJ Police and Fire Pension System, I contribute 8% of my salary every two weeks...8%! That comes to about $130 week for the privelege (?) of having a secure retirement. I can get 50% after 20 years with no benefits. 65% after 25 years with benefits.
06-18-2003, 09:55 AM #3
Interesting reading. It's amazing at the differentials in regards to pension systems. Here we get 2.5% for the first 25 years and 2.1% after, to a maximum of 35 years. You can retire here at 25 years with no age limit and full benefits. If you were to stay the full 35 years you would get 83.5% of your last 5 year average with full benefits. The nice thing is that you put in 5% of your pay into the pension system, plus your annuity earns an annual interest rate according to how much the pension system made on it's investments. You can withdraw all your annuties at 25 years or when you retire, your choice. The average annuity through the pension system now is around $240,000. Most roll it into a mutual fund and draw monthly on that amount. The $240,000 is deducted from your pension and the average cost of that is around $200-400 a month less (depending on age at retirement, the younger you are the more it costs you) in your pension check but your drawing on another account containing that $240,000, which generally averages more than the $200-400 less that your getting in your pension check. We also get a 2.1% increase each year after retirement and that percentage is compounded. We also have a 40 and 8 program that allows you to retire after 40 years old and have at least 8 years of service in. The percentages stay the same but full benefits don't kick in until you would have had your 25 year minimum in.
06-18-2003, 10:26 AM #4
In Illinois, we contribute just under 8.5% per check. After 20 years of credible service you are entitled to 50% of your salary. To collect it however, you must be 50 years old. Every year after 20, the amount you can collect goes up 2.5% to a maximum of 30 years and 75%. There has been some talk of lowering this to 26 years 8 months and 80%. There are 2 firefighters pension funds in our State. Chicago has their own and everyone else belongs to the "Downstate" pension fund. I would have to work until I was 53 to collect my 75% under the current plan.
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