Council to amend pension plans
City council unanimously approved the first of two required readings of five amendments to the firemen’s pension plan and three to the police pension plan, aimed at bringing the plans into compliance with Pennsylvania’s Third Class City Code. “For nine years we’ve been out of compliance with the Third Class City Code,” solicitor Daniel Webster said at Tuesday’s council meeting.
He said the attorney general’s office has cited the city annually for not complying with the code, and that failure to comply made the city ineligible for state aid if the pension plans would have become insolvent.
The amendments address “significant issues to the soundness and longevity of both plans,” Webster said
The city and the employee unions have been negotiating the amendments since the end of last year, Webster said, noting that certain provisions were added to compensate for some of the benefit losses.
One of the key changes is the reduction of the normal retirement pension rate for firefighters and police to 50 percent of the employee’s monthly salary at his or her retirement date, or 50 percent of the employee’s average annual salary during any five years of service, whichever is more.
Currently, both are 60 percent. The amendments will be enacted at the July meeting if council approves.
Added to both plans were cost-of-living increases in pension benefits and agreements in which the city will decide annually whether employee contributions are needed.
The decisions will be based on a study from the plans’ actuaries.
Deferred retirement option plans (DROP) were also added to both plans.
Webster explained that if an employee provides the city with his or her retirement date four years in advance, the pension benefits will be placed in a DROP account and collect interest for those four years while the employee continues to work.
An increase in the number of years of military service that employees may purchase was added to the police plan.
The number of years was increased from three to five and officers must have served in the military after Sept. 1, 1940.
Three other amendments affect only the firemen’s plan.
One provides disability pensions to firemen left totally disabled due to on the job injuries. The disability pension benefit rate would be the same as the normal pension benefit rate.
The second repeals the total disability benefit for injuries not suffered in the line of duty and the survivor’s benefit for minor children.
The third redefines the normal retirement age to at least 20 years of continuous service and repeals the early retirement provision.
Currently, the retirement age is at least 20 years of continuous service and an age requirement of at least 50 years old.
In other business:
– Parks and recreation department head Ken Misiak said the city’s six parks will open June 10 and close the first week in August.
– Council re-appointed W. Lawrence Bush and Katharine Carr to the Uniontown Public Library Board until April 1, 2005.
– Council approved an updated emergency operations plan.