Eliminating DBs for future non-union ee's

The Council's Personnel Committee met tonight. I mentioned yesterday that the discussion was going to cover pension plans (defined benefit (DB) vs. defined contributions (DC)). When I asked for this discussion in June, my goal was to move the long-term liabilities risk* from the taxpayers to the employees.

But to fully understand my desire, let me breakdown town employees into four categories as such:

The left side of the table is irrelevant for my purposes here. Unions negotiate. And while I'm comfortable spending more to encourage the unions to move from a DB to a DC plan, negotiations are necessarily involved. And that process would take time. But in the meantime, the Council could act immediately with non-union employees.

However, if existing non-union employees suddenly had their DB plan revoked (or simply changed), I think there'd be legitimate outrage. So if that's to change, there ought to be input heard from employees by management. Nonetheless, this still leaves one category - future non-union employees.

I'm of the opinion that we should have eliminated the DB as an option for future non-union employees back in June... and should do so immediately. Of course, fewer options would increase the difficulty in finding the best staff. Frankly though... with the economy looking the way it does... I don't think the town will need to be offering huge benefit packages to get qualified employees.

Tim White

* I define this risk as the potential underfunding of pension plans. Such an underfunding would be similar to the underfunding of the teachers' pension at the state level and the underfunding of social security at the federal level.