Waterford First Selectman Lobbies to Change Municipal Retirements

First Selectman Dan Steward had a simple message for the state legislature Tuesday: have municipal employees pay more for their retirements, and have the taxpayers pay less.

Tuesday, Steward testified during a public hearing by the state legislature’s Labor and Public Employees Committee, saying the Municipal Employee Retirement System (MERS) needs to be changed. Waterford is part of MERS, which is controlled by the state, and Steward argued that town employees should pay more for their pensions and the taxpayers should pay less.

“It has to make some equity adjustments,” Steward said.

When Waterford first signed up for MERS in 1991, the town funded 55 percent of an employee's pension, and the employee paid 45 percent. Today, the town pays funds 81 percent of an employee's pension – and 86 percent for public safety employees – while the employee pays 19 percent, with public safety employees paying 14 percent, according to a letter by Steward.

The Waterford Board of Finance has sent letters for at least the past three years complaining about MERS, and there have been some bills in the past that have quickly gone away. Steward said this is the first time in his tenure that a bill to change MERS has made it to a public hearing, saying the state legislature has been reluctant to have government employees pay more in the past.

“This is a (government) employee-favored legislature,” Steward said. “They don’t want to hurt the employee. But the taxpayers are paying for it.”

MERS covers all Waterford employees, aside from Waterford teachers and Board of Education administrators.

Specifics/Gripes

Waterford has been part of the MERS system since 1991, and it is expensive to get out of the system now that the town is in it, Steward said. There are several problems with the MERS system, most notably that the taxpayers are continually asked to pay more for employee pensions while the employee pays the same amount, he said.

In 2004, Town of Waterford employees paid 2.25 percent of their salaries to their pensions, and the town paid 3.75 percent for general employees and 4.25 percent for public safety employees (i.e. firemen and police officers), according to town documents. This year, Town of Waterford employees still paid 2.25 percent of their salaries to their pensions, while the town paid 11.79 percent for general employees and 16.65 percent for public safety employees, according to town documents.

“The increases have been phenomenal,” said Waterford Finance Director Rudie Beers, who, like Steward, benefits from MERS. “And meanwhile the employees' share hasn’t changed.”

This year, State Sen. Andrea Stillman, D-Waterford, and State Rep. Betsy Ritter, D-Waterford, introduced a bill saying that town employees should pay more and the taxpayers should pay less for these pension plans. The bill is vague, but Steward is hopeful to get the state retirement board to have employees pay more for their pensions.

Steward also wants a representative for the municipalities as a voting member of the state retirement board. Right now, a representative for the municipality sits on the state retirement board, but they have no vote, Beers said.

“To me, it is why we had the Boston Tea Party,” said Beers, suggesting the municipalities were experiencing taxation without representation.

About MERS

MERS is based on of the number of years a town employee has worked and the last three years of salary, including overtime. The last three years of salary earned by the town employee are averaged together. 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.