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City Council Considers Retirement Age Requirement

Jenna Carlesso

November 05, 2010

A generous provision of the city's retirement policy could be rescinded for future employees under a new proposal from the city council.

Councilman Matthew Ritter, at the recommendation of a fiscal analysis task force, has proposed requiring city workers to wait at least until age 55 before retiring. Now, city employees can retire after 20 or 25 years of service, regardless of how old they are.

Under the proposal, employees would not be able to collect a full pension until age 62. Those who opt to begin drawing a pension between 55 and 61 would get reduced benefits, Ritter said.

The proposal would not affect current employees or those who are members of a union bargaining unit. It would effect only employees who hired on or after July 1, 2011.

"I don't know of any other town that has a pension plan like ours," Ritter said. "It's excessively lavish."

Retirement terms can differ by employee, but some are entitled to retire after 20 years of work, while others may retire after 25 years, city Treasurer Kathleen Palm Devine said. That means an employee who starts working for the city at age 18 could begin collecting a full pension at 38.

Employees 60 and older must have completed at least five years of service to retire with a pension, Palm Devine said.

Ritter has introduced a resolution requesting assistance from the mayor's office in amending city ordinances to raise the age at which non-unionized, unclassified employees could begin collecting pensions.

"We want to be more in line with our neighboring towns and the state," Ritter said. "The city just can't afford it."

The city has about 125 non-union, unclassified employees, although they would not be affected by the proposal since they were hired before July 1, 2011. The positions are mostly department heads or deputy department heads appointed by the mayor, Ritter said.

The city's projected pension contribution for the 2011-12 fiscal year is $30 million, including both union and non-union employees.

"Raising the retirement age would be a very small start, but it could make important dents in the future," Ritter said. "[Employees] could get away from the notion of collecting a pension in their 40s."

Some ordinances referring to the city's pension plan were written 25 years ago, Ritter said.

"The life expectancy since some of these plans were adopted has gone up considerably," he said. "We need a plan that reflects that."

The idea initially came from a fiscal analysis task force, a panel of five business people who were asked to recommend cost-saving measures. The council appointed the task force in 2009 to address a growing budget deficit.

Members of the committee made a series of recommendations earlier this year, including a minimum retirement age.

Mayor Pedro Segarra said he already is considering the matter. He said he also hopes to reach a comparable deal with union employees.

"We can't just wave a wand and say [the age] is going to be 55 to 62. We have to look at every one of our collective bargaining agreements," he said.

Segarra agreed that some city ordinances regarding pensions are outdated.

"People are living longer. Plans are getting more and more expensive," he said. "The only way to balance that off is by increasing the retirement age."

Ritter said he did not think the proposal would dissuade people from joining the city workforce.

"We're not talking about reducing pensions or taking them away," he said. "We're not doing anything drastic."