Elimination of DB plans for future non-union hires is on the agenda!
I'm excited. I can barely believe it. It's finally happening!
Here are the annual changes to the Personnel Rules & Regulations. You may find it interesting. One thing that Tom Ruocco has been advocating for a while is ending the practice of accumulating vacation days in perpetuity. For instance, it's not uncommon for Town employees to have in excess of 100 vacation days (five months) after many years of service. Tom wants to end that practice and move to "use it or lose it."
See the details here:
And here's my baby... the issue I've been trying to address for years - moving from the use of defined benefit pension plans (DB) to defined contribution pension plans (DC):
I'm not sure why the 6% value was chosen, but I get 4%. And I spoke with someone else who gets 4.5%. But since South Windsor gives 12.7% for their DC plan, I'm thinking that getting City Hall to take any action, including the 6%, is worthwhile.
But remember, this only addresses one of four groups of town employees - future non-union employees:
I'd like to continue moving from DB plans to DC plans, but that will require both leadership and a belief by all stakeholders that negotiations are being conducted fairly and respectfully. I'm not holding my breath. I mean, how someone in senior management could've gotten a 6% raise after the recession started dumbfounds me. That doesn't exactly set a precedent for building good relations.
Changing topics a bit, but staying with the DC plan... one amendment that I hope is made to this is a requirement that the 6% is established as a match. That is, my hope is to encourage employees to save for the future. As such, I think employees should receive the 6% as a match. One for one matches seem common, but I'd be open to a different ratio.
Last, but not least... I again thank Councilman Sheldon Dill for making this happen. My guess is that it won't be a 5-4 vote on Tuesday. But I assure you, this wouldn't be on the table if it weren't for him. And even if there's significant change in the Council composition in November... City Hall would still dawdle for months and months... then say "we'll do it during the annual changes to rules & regs"... and it'd be another year before this change was implemented. So I thank Sheldon for this.
Tim White
p.s. Breachway - any comments on the details?
3 comments:
There is no requirement that the town contribute anything. So it is a matter of how big you want the benefit to be. As municipalities/gov't agencies begin to stop their DB plans,how much they want to make up for it with 457 matches is the big question. You obviously want to give a decent match, but not one that defeats the purpose of trying to reign in expenses. I would say that 6% is at the high end of 3%-6%typical employer contributions. There are too many variables to just say S Windsor gives 12% without knowing their full benefit package. I thought I read somewhere that they stopped that plan. Good point on the matching comment. More assets going into the plan, the cheaper the typical costs. Hitting breakpoints will also lower internal fund fees, so the more money going in, the better. The town should offer this to all employees whether they are under the DB plan or not for this purpose. You could provide no match to those in the DB plan. It would kind of be an "extra benefit" if you like-as their are pluses to being in a DC plan vs. DB. My opinion is that you need to talk to retirment plan providers or benefits specialists, get quotes, to get a better idea of what the town should do.
Thank Dill?
No, thank Shrum. He was the one who forced the issue to the table three years ago where the D's killed any reform.
As for Dill....just watch. If they need his vote he will change his mind at the last minute. He has a lot of practice doing that. As a matter of fact it is the only skill he has honed during his years on the council.
Schrumm has pushed for the conversion from DB to DC. That's very true. My guess is on this particular issue, there's strong agreement between the two.
But Schrumm was pushing for a conversion of all four ee types... an idea with which I agree in principle. But this is a baby steps approach that came to me more than a year ago (but after Schrumm was a private citizen)... after I realized the broad approach was going nowhere fast.
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