As the political winds shift away from hefty retirement benefits for public employees, Newport Beach may boost the amount it gives the city’s largest employee union. But an important distinction — and likely the reason city officials agreed to the pension hike — is that employees themselves will pay for it.
The union that represents about 640 full-time city employees, essentially most city workers other than police and fire staff, was granted a half-percent increase in pensions, so members would be able to retire with “2.5% at 55” rather than 2%. Under such plans, employees who retire at age 55 can collect a percentage — in this case 2.5% — of their final-year salary, multiplied by the number of years they worked for the city.
Pension plans can be costly, so a key provision of this boost is that union leadership asked to apply some of a future pay raise to cover the added retirement costs. The council might not have agreed to the new contract otherwise, considering that Councilman Keith Curry recently suggested a charter change that would subject future pension increases to voter approval.
