“The immediate benefit of this is that new employees will be paying a certain percent of the pension cost, and that’s a savings to us,” he said. “The (larger) benefit will be seen over time.”
The plan will save the county an estimated $4.4 million during the three-year term of the agreement, according to a report prepared by county staff.
The agreement between the county and deputies’ union — which runs through October 2012 — calls for new deputies hired after enactment to receive a “3% at 55” pension benefit, which means at age 55 recipients can begin collecting 3% of their final-year salary for every year they served.
Existing employees will remain in the current “3% at 50” plan but will have to contribute up to 5% of their income to the retirement plan. New employees will begin paying 6.6% of their income as a retirement contribution.
The plan will go into effect April 9.
Moorlach said he would reluctantly vote to approve the plan, even though he favors cutting the deputies’ retirement benefit to “2% at 50.”
“I would have certainly liked to have seen a more aggressive change,” he said.
The county employees’ pension fund faces a future deficit of $3 billion, in part because deputies have never contributed from their paychecks as other county employees do. Moorlach asked county staff for a more complete analysis of how the plan will affect the future unfunded liability.
The new plan also will impose a salary freeze on deputies through at least October 2011.
In return, deputies will receive increased contributions from the county to their medical trust fund. The agreement requires the county to pay $745 per employee per month, compared with $620 under the old arrangement. Also, the county’s contribution will increase twice more before the agreement expires.
