Petaluma OKs reduced pension benefits for new employees
Published: Friday, December 28, 2012 at 9:18 a.m.
Last Modified: Friday, December 28, 2012 at 9:18 a.m.
The Petaluma City Council Thursday unanimously approved an amendment to its contract with the state retirement system to create a second tier of retirement benefits for new employees.
The changes take effect today and cover non-public safety employees of the city’s largest union. Earlier, the city reached similar agreements with its police, fire and other bargaining groups.
New non-public safety employees will have to wait until age 60, instead of 55, to be able to retire with a pension equal to 2 percent of their pay per year. New police and firefighters have to work to 55, up from age 50, for a maximum of 3 percent yearly accumulation.
The two-tiered retirement system provides no immediate savings to the city and only modest savings in the coming decades as the workforce turns over.
When the ratio becomes half-and-half between first- and second-tier workers, the city will save just under $600,000 annually in its contribution to pension benefits.
Petaluma’s public safety employees contribute 9 percent of their salaries to retirement, while miscellaneous employees contribute 7 percent.
You can reach Staff Writer Lori A. Carter at 762-7297 or firstname.lastname@example.org.
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