Wednesday night, for at least the third year in a row, the Waterford Board of Finance agreed to send a letter complaining to the state about town employees' retirement plans, calling the retirements “unsustainable” and “completely out of whack.”
“This whole thing is completely out of whack,” Board of Finance member Alan Wilensky said. “What is fair is fair, and this is ridiculous.”
The board’s gripe is from the increases in cost of retirement for town employees under the state-controlled Municipal Employees Retirement System (MERS), of which Waterford is part. The problem with the system is two-fold, according to the Board of Finance’s letter: towns are continually forced to pay more, while the employees share stays the same; and overtime is being factored into retirement benefits, and they argue only base salaries should be used for factoring retirements.
“Our board feels strongly that municipal fringe benefits should align to those in the private sector, especially since municipal employees’ wages are now equal to or better than those in the private sector,” Board of Finance Chairman Ron Fedor wrote in the letter.
The Complaint
As late as 2004, towns would contribute 3.75 percent of a municipal employee’s salary, and 4.25 percent of salary to fire or police municipal employees, to their retirement to fund MERS, and the employee would contribute 2.25 percent.
In the past eight years, the taxpayer’s percentage has increased drastically, while the employees’ contribution has stayed flat. This year, taxpayers will contribute 11.79 percent of a municipal employee’s salary to retirement, and 16.65 percent of salary to a fire or police municipal employee, while the employee still contributes just 2.25 percent.
“Over the past several years, the Town of Waterford has experienced a tremendous budgetary increase in the cost of providing retirement benefits as a member of (MERS),” Fedor wrote in the letter. “The Waterford Board of Finance has been forced to grapple with funding these increases annually, sometimes at the expense of its service level.”
Wilenksy argued the employee share and the employer share should be the same, like it is for Social Security. He successfully lobbied Wednesday night to put in the letter that the town’s share should continue to go down and the employees’ share should continue to go up until they meet.
The board also agreed that pensions should be based off of base salaries, not salaries after overtime.
Other Options
First Selectman Dan Steward said it is hard for the town to get out of MERS and said he would get a legal opinion to see if that is even possible. Board of Finance member Norman Glidden said rather then sending a letter and complaining, the town should slowly get out of MERS.
“I think it is a failing system,” Glidden said. “It is a system that puts us in-between a rock and a hard place and keeps squeezing.”
Board of Finance member Mark Wiggins agreed, saying if the town doesn’t start working on it now, it will never happen. Both men agreed that the town should leave existing employees’ benefits alone, but try to get new employees to have a defined contribution plan instead of a defined benefit plan or a 401K system.
“It is a big effort, so what, do it,” Wiggins said. “What’s the alternative to it, just sitting here and complaining about it for the next 10, 20 years?”
How Lucrative Is The Plan?
MERS is based on of the number of years the employee worked and the last three years of salary, including overtime. The last three years of salary earned by the town employee are averaged together. Then for each year a town employee works, the employee collects 2 percent of that average.
For example, if a town employee made $75,000, $80,000 and $85,000 in his or her last three years, and worked in the town for 30 years, he or she would collect 60 percent of $80,000, or $48,000 a year for the rest of his or her life. That number increases over time for cost of living.
The percentage is capped at how much you can collect. In most contracts, you can’t collect more than 75 percent of your salary, which would be achieved after working 38 years.
To start with, the ability to increase the salary base by including overtime is a sham. Some of those employees never worked overtime in their entire career or avoided it whenever possible. Now, in their last three years, they look for every hour of OT they can heap on to line their retirement nest, at our expense. Another rule that needs to change is that the employee share never increases and increases are all passed on to the town (taxpayers). It is past time for all towns to rally together and protest this to Hartford and change this system that is stealing from us all.
The soldiers that stay in the service, have to maintain physical standards and meet height/weight standards. They have to be fit. We should expect nothing less of our police and firefighters. Then, maybe they could continue to serve in their positions as well.
Millions of work professions, starting with our heroic military personnel who are the most underpaid, under appreciated, riskiest duties, worse working conditions, least predictable occupation and destiny on earth---and no one speaks of these valiant people but instead talk about civilian city, state, and federal jobs as underpaid minions working under horrible conditions, with immense stress, possessing tremendous technical expertise and superior educational preparations, rather than the truth that they are the most pampered over paid, working class in the entire history of the world.
I am sure it has not been seriously looked at, and if so, it would be looked at by the same bureaucrats who also generously (criminally) benefit from the same system of abuse. Also when the abuse of overtime is present, it will not be addressed because the City. State and Federal employment system system is rigged to permanently benefit their workers and supervisors at the expense of every tax payer. Because the private sector taxpayer can be taxed and taxed to cover these abuses, there is absolutely no stimulus for the City, State and Federal employers to change this. The CT media such as the Day newspaper, Hartford Courant, the Patch, and other papers are too timid to do investigative reporting because they get by by doing fluff reporting on financial issues. A few citizen action groups publish the retirement benefits of the top 500 CT State employees, and it is absolutely criminal to see what these people receive. You asked a good question if private citizens can see the results of these abuses, but you will have more luck at seeing the Hope Diamond in your yard, And if you are lucky enough to find the Hope Diamond you will interested that its value is less than the top 10 CT State officials receive in pensions (see the list of CT's top 500 pensions).
I do agree with your remarks on our military and their pay and work conditions. But as a federal employee, my position was working side by side with the military under the same conditions as they did for even less pay than they received. And the military retirement is better than the federal civilian employee retirement. I know because as a 30 plus year member of the National Guard, I also receive a military retirement. I'm sure this must sound like a lot of retirement coming in for me. I assure you, it is not. It is less than most of those state and municipal retirees receive.
we now have professional negotiators (BULLIES/BLACKMAILERS) championing the value of their private 'minions', and providing for themselves as well (through union cost/dues/affiliations). these unions represent nothing more than another layer of 'take away' from the effort and value that the real workers provide. i'll go so far as to say this applies not only to municipal or public employees, but ALL unions as well. as the numbers of people and workers escalates, their intrinsic value becomes less and less (supply<>demand) and they become vulnerable to UNSCRUPULOUS management and sadly, to political interests in elected positions with 'less than virtuous' ideals of their own. well, anything goes these days, since no one is keeping an eye on these hidden, behind closed doors negotiations. by law, this should clearly be public record, under scrutiny of the very people stuck paying for it! secrecy, what a heap of crap!
You may want to brush up on math instead of Goggle what the Hope Diamond is worth. The Hope Diamond is worth about 200 million. The top 30 state workers persions are worth MORE then the Hope Diamond. Several of the top 20 retieees received pensions over $ 200,000 each PER YEAR. Just the girls and mens basketball coaches at UCONN receive huge pensions---and they are not even the highest CT pensioners. This title goes to several professors in the CT State college system. If they collect their retirement for 30 years ( they retire at age 55-58), just one individual at $ 286,000 a year the last time I looked at the list alone collects almost 9 million in his lifetime for just ONE retiree. Multiple that by the top 30 retirees and you EXCEED THE WORTH OF THE HOPE DIAMOND. The math you did was for just one year, whereas CT will pay these huge pensions for the top 30-50 individuals for their entire lifetime. The Hope Diamond is a one time value event and cannot be multiplied for a lifetime that the CT State retirees collect
And I did consider the lifetime value of the pensions.Some will live to collect for 30 or more years, some will not. I am quite sure an actuary would come up with a number under $200 million to $250 million. Whatever the amount, we do both agree that it is too much and needs to be made more reasonable. Until we the voters rise up and say "Enough!", nothing will change except for the worse.
Please go on Goggle and write the question ; WHAT ARE THE PENSIONS OF THE TEN HIGHEST EMPLOYEES IN THE STATE OF CT. When I did the web page showed the following ( I only have listed the top 4) ---John Veiga (UCONN) $ 272, 952 per year pension J---ack Blechner (UCONN) $ 266, 241 per year pension ---Eleanor Henken (wife of UCONN worker) $ 236, 166 per year pension ---Edward Blanchettet ( CORRECTION dept) $ 223, 880 per year penion Just the top 10 State pensions are over $ 2.2 million a year . Thus for 35 years just the top ten people get $ 77,000,000 in pension. If you add in the next 300 retiress it exceeds the Hope Diamond. The web site shows that there are over 100,000 people collecting State pensions. The pension list goes on and on for pages, and it shows to the penny what each retiree gets. I know that you are stuck on trhe Hope Diamond analogy, and it was used as just an example ...but the math bears it out.
But since neither you or I nor the state has the Hope Diamond, it will make little difference what it is worth or how many pensions it might pay for. The fact, which we both agree on, is that those state and municipal pensions are far too generous and we can no longer afford to pay them. Something must be done to stop the madness.
You are an optimist ! Do you really expect an answer ? The people in Waterford government you are asking for an answer are themselves in line for a pension of over $ 100,000-$ 150,000 a year...so why would they investigate or protest or care ? Don't worry. Obama is going to bail out all the Blue Union States that voted for him just like GM. Then all the prudent States that acted responsibily will be required to pay for CT's and CA debt. Now that was easy, wasn't it.
For the second part, these retirements are actually fully funded. Unlike the state, towns have to follow specific accounting practices and fund these retirements fully. The problem your talking about is for state employee pensions. The state, unlike towns, do not have to follow the same accounting practices. So those retirement benefits are underfunded. In fairness to Gov. Malloy, he has taken steps to address that, where it was basically untouched in the last two administrations. Still, they remain underfunded. But from a fiscal perspective, the municipal retirements are okay. The state retirements are another story.
Also, not under discussion, are health care contributions. As with the retirement, we contributed 50% of the health care costs. I'm sure that the state and local government employee contributions is nowhere near that.