Editorial / First selectman picks a pension -- for himself
Published 5:43 pm, Thursday, January 24, 2013
Private-sector employers years ago began switching their new hires from pension plans -- with their runaway costs -- to 401(k) or similar retirement plans.
In doing so, they've been able to manage their costs by defining what they would contribute to a plan but not what the ultimate monthly benefits might be.
The public sector lagged far behind in making similar conversions to reel in taxpayer costs.
To its credit, town officials last year committed to begin converting town retirement plans by assigning to hires not to pension plans but to 401a plans. The 401a plans are similar to 401(k) plans in that they define the contribution but not the benefit.
But when it came time to put his money where his mouth is, First Selectman Michael Tetreau chose not to lead by example and take a 401a plan. Instead, he put himself on a pension plan which -- if he remains in office long enough to be vested -- would guarantee a fixed benefit at retirement.
He also put his recently hired chief of staff and the town's new Department of Public Works director on pension plans.
For union employees -- such as police, firefighters and other groups -- retirement benefits are spelled out in contracts. So the change in benefits for new hires must be negotiated with the union and written into new contracts.
The school nurses, town hall employees and Emergency Communication Center works all recently have ratified new contracts that assign new employees to 401a programs, not the municipal pension plan.
Tetreau, however, is not a union member, and his actions speak far louder than words about cutting costs. He has endorsed a double standard.
Until now, non-union employees -- including elected officials such as the first selectman and town clerk, plus department heads -- have been covered by the municipal pension plan. Tetreau says those groups' benefits have followed those of the mid-managers union.
If it is consistent, the town should be negotiating the same new-hires switch with that union, which has yet to ratify a contract.
But while it may have been a custom for non-union employees to get the same benefits as unionized mid-managers, the town is not obligated to continue that custom.
Thomas Flynn, chairman of the Board of Finance, has criticized Tetreau for putting himself in a pension plan. He said an assessment of the first selectman's salary and benefits could be made to switch Tetreau to a 401a plan.
The town last year came to grips with the dire, long-term, financial ramifications of antiquated retirement plans and made a prudent decision to begin conversion.
The town was under no obligation to put Tetreau and his new hires in pension plans, and to do so is contrary to the spirit of the change affecting other new hires.
What's good for the goose is good for the gander.