Sunday, March 22, 2009

Some municipal pension plans of CT towns

I called the CT Conference of Municipalities two weeks ago for information on school bus contracts and the current offerings of municipal pension plans.

With regard to the use of defined benefit and defined contribution pension plans, five towns responded. If I understand this information correctly, four towns continue to offer DB plans to non-union employees. One town stopped the practice in 2006. Here are the details:

With a $20,000,000 deficit in the defined benefits pension fund, I want the Council to stop offering the DB plans to future non-union hires to limit the taxpayers' exposure. And I also want to do this because I see no guarantee that employees will actually receive those benefits in 30 years.

Breachway... any comments? I know this is your field of expertise.

Tim White


Breachway said...

What else is there to say Tim? How many times can you ask for something without any real follow up from the rest of the TC. I really can't see continuing the DB plan. Just went thru a meeting regarding our DB plan- which has been phased out for new hires over the last 3 years (we had the foresight to see we can't keep gauranteeing a DB to our employees- and this was before the market tanked). Our liability sky rocketed due to the market turn. I think you will see the corporate world taking a real beating in their liquidity due to the extra funding involved this year. As far a Cheshire goes: if they were ever going to hire a consultant, this would be the topic. I have seen the finance lady talk about DB vs DC but I don't think she has enough knowledge of what is going on in the real world with these plans.

tim white said...

more specifically, I was wondering about the 4.5% / 12.7% ee / er match.

Isn't that unusually high? I think my 401K is up to a 4% er match.

Anonymous said...

I couldn't believe the Police Chief asked for a raise from 93k to 107k. It seems that he was recently made chief and I would suppose he got a pretty good bump.

There have been cases in other town where the Police chief got a pretty good raise and then retired within a few years. Since the retirement amount is, I believe based of the last 3 highest years earnings, a significant raise could provide a good reason to retire, and this is just the opposite of what a raise is intended for.

I noticed that someone mentioned that the chief may not be making an amount comparable to surrounding towns. Well, who really cares. At 93k or less, there would be many qualified applicants who would be very happy with the salary. Should we look at other towns trash contracts and if we find that they are paying more, should we pay our contractor more?

Anonymous said...

Same goes for the sup. of schools and the town manager. Over paid and under worked