New police union pact would maintain standard pensions
Unlike some recent contracts between the town and municipal employee unions, a newly negotiated police union pact would continue to cover new officers under the standard pension plan and not a defined-contribution plan that has been a goal of some Representative Town Meeting members.
New officers covered by the pension plan, however, would receive a lower retirement payout.
The three-year contract, which is almost entirely retroactive and expires in just three months, has been ratified by the 106-member union, but must be approved by the Representative Town Meeting. The RTM votes on the contract at its next meeting, set for 8 p.m. Monday in the Education Center on Kings Highway East.
All of the town's last municipal employee contracts expired June 30, 2010. Two of the contracts negotiated since then -- the firefighters and Town Hall employees -- were originally rejected by the RTM in part because new hires' retirement benefits were not covered by a defined-contribution, or 401(a), plan. New firefighters are now offered the option of a 401(a) plan or the standard pension, but newly hired Town Hall workers, staffers at the Emergency Communication Center and public health nurses all now are covered by 401(a) plans.
"I think it will pass," RTM member Peter Ambrose, R-2, said of the proposed police union contract. "Although in the long run, it may not be the best way to go, in the short run, it will be."
Ambrose said area municipalities all have their police and firefighter retirement benefits covered by a defined benefit plan, or a standard pension, rather than a defined contribution plan.
Under the new police contract, however, there will be a lower retirement payout. Anyone hired after the agreement is ratified will be eligible for a maximum pension of 70 percent of his or her base salary, compared to 80 percent for current employees. In addition, the maximum cost-of-living increase for the pensions will be 2 percent for new employees, compared to 3 percent for current employees.
"From what I've seen, it appears to be a fair contract," Ambrose said.
RTM Minority Leader Hal Schwartz, D-7, generally agrees.
"It is fair to both the union and the town with both sides giving a little," Schwartz said. "Remember, this contract will expire on June 30 of this year, so both parties will be back at the table very shortly."
Schwartz said he doesn't object to new Police and Fire department employees receiving standard pension plans. "As a unit, I think they should be handled differently than the other town unions," he said, stressing that view is a personal one.
He said from the information he has gathered about the police contract, he will be asking other RTM members to support it was well.
The contract also provides no retroactive increase for workers in the first year of 2010-11, and a wage increase of 2 percent retroactive to July 2, 2011, and a 2.75 percent increase retroactive to July 1, 2012. Wages will increase 0.75 percent on June 30, 2013.
Once ratified, current employees will pay 11 percent of the "blended rate" of the town's medical and dental insurance premiums, while new hires will pay 13 percent of premium costs for the level of benefits selected. Some co-payments will also increase.
Employees will also pay 1.5 percent of their salary, plus longevity, toward post-employment medical benefits.
Sick leave will change, allowing 10 sick days to be accumulated per fiscal year, up from five, and the maximum total accumulation will increase from 80 to 120 working days.
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