"We're happy about the outcome for the taxpayer," said Councilwoman Leslie Daigle.
In 2010, Newport paid about $500,000 toward the 14 full-time lifeguards' pension plans.
Guards currently have a contract that makes them eligible for a pension worth up to 90% of their largest paycheck at age 50. If their new contract is approved Tuesday, newly hired employees would have a pension worth up to 50% less.
Lifeguards will also pay 9% of their salary toward pensions instead of the 3.5% they pay now.
The city's full-time guards were facing layoffs in the fiscal 2011-12 budget, which is up for adoption Tuesday, so they negotiated with City Manager Dave Kiff to trade pension cuts in exchange for jobs.
Ultimately they were able to keep all 13 of their employees, although one will spend some time as the Police Department's new crime prevention officer. That person will replace the current D.A.R.E. officer, who will be shifted to other duties.
The new budget eliminates some of the lifeguard overtime and special pay as well.
"It keeps the public safe and addresses our budget challenges," said Kiff.
Representatives of the Lifeguard Management Assn. did not return calls seeking comment Friday.
City officials are looking toward the fall, when contract negotiations begin with the fire and police unions. Kiff said he hopes they also will accept a so-called "2% at 50" pension formula instead of their current "3% at 50" plan, and that they agree to pay 9% of their paycheck toward retirement.
"I thought it sets an appropriate tone going into the rest of our safety discussions," he said.
But firefighter and police unions, with their hefty budgets for political campaigns, are harder for politicians to oppose than lifeguards.
Daigle was more circumspect about the other public safety retirement plans.
"These are negotiations," she said. "It's not a math problem with one solution."