RTM OKs new retirement benefits plan for non-union town workers
Published 5:59 am, Wednesday, October 3, 2012
Signaling a new era in Westport for public employee benefits, the Representative Town Meeting on Tuesday night overwhelmingly approved a new defined-contribution plan for new non-union town employees.
The plan will cover new non-union employees hired after Jan. 1, 2012, instead of the pension that were traditional in the past. A flexible contribution scale constitutes one of the plan's most important features. New non-union employees will have to allocate at least 3.5 percent of their annual base salaries to a defined-contribution plan, a contribution that will be matched by the town.
After making that initial 3.5 percent allotment, non-union hires can then choose to make additional allocations worth another 1.5 percent of their annual salaries, which would raise their total defined-contribution plan contributions to 5 percent. The town will also match the optional, higher contributions, meaning that non-union town employees could accumulate as much as 10 percent of their annual base salaries each year for the new retirement-savings accounts. Those contribution levels were endorsed last week by the RTM's Finance and Employee Compensation committees when those panels chose to amend a recommendation by First Selectman Gordon Joseloff's administration for the town to match employee contributions up to 7 percent of their salaries.
"There's a general mood that getting a plan ... is a good thing, especially since there is no plan in place for current [new non-union] employees," said RTM Finance Committee Chairman Jeff Wieser, District 4. "This is a pretty fair plan that many of us have seen in our own lives." \
Town officials have moved aggressively during the last year to introduce defined-contribution plans for new town employees. In February, the RTM approved the elimination of pensions and post-retirement health-care benefits for new non-union employees. In April, the RTM approved new contract terms for the town's public works union decided by a state arbitration panel. The state arbitrators' ruling called for newly hired public works employees to join a defined-contribution plan, in which the town would match worker contributions worth 5 percent of their annual salaries.
But not all RTM members rallied to support the proposed terms of the new defined-contribution system.
"I want our plan to be fair, and I want it to be competitive with neighboring communities," said Jack Klinge, District 7. "I don't want to lose quality, key employees to a neighboring town due to an inferior defined-contribution plan ... I'm not comfortable yet that we're going to outduel Fairfield, Weston, New Canaan, and Darien for key personnel."
The defined-contribution plan for non-union will also include new non-union education employees.
Education officials, including Superintendent of Schools Elliott Landon and acting Board of Education Chairman Jim Marpe, expressed support for the creation of a new defined-contribution plan, but called for the RTM to postpone a vote on a new retirement savings framework until education officials received answers to "technical questions" related to the eligibility of school system workers to participate in defined-contribution accounts with the commonly used 401k format.
School system personnel currently can enroll in defined-contribution 403b accounts, which are similar to 401k plans. If education workers were not allowed to participate in 401k plans, Landon argued that the school district could be forced to set up its own defined-contribution plans for new non-union hires.
"It seems like a giant complication and extra expense for the town that I think is unfair to taxpayers," Landon added. "And without having an answer to that [401k plan eligibility] question, I don't see how we can really move forward."
Several RTM members, including RTM Education Chairwoman Velma Heller, supported education officials' request for a delayed vote.
"I think if they feel that their questions could be answered within a week, isn't too bad that we couldn't just respond within a week?" she said.
Gil Nathan, District 9, countered that delaying a vote would not change the RTM's decision.
"I think it's the right move," he said of approving the proposed defined-contribution plan. "If you don't think it's the right move then, fine, delay, because it does nothing. All it does is rehash issues for people who didn't like it in the first place."
Most of Nathan's colleagues took a similar position. RTM members voted 22-6 to reject a motion to postpone their vote until Oct. 16 and 20-8 to turn down a motion to delay a vote until Nov. 13. They finally voted 24-4 to approve a new defined-contribution plan.
Non-union education workers will have the same eligibility for the new defined-contribution plan as other non-union town employees, according to Finance Director Gary Conrad.
"We can customize them," Conrad said of education employees' defined-contribution plans, in an interview with the Westport News after Tuesday's meeting. "They're turnkey operations."
A handful of non-union town employees are eligible for the new defined-contribution plan, including Conrad.
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