Pension compromise for local governments gets easy approval
A carefully-crafted compromise between local government and their unions to shore up their pension funds won easy approval in the Senate Budget Committee Thursday.
The Senate Budget Committee approved SB 1128 with only two no votes, opening the door to new rules and financial assistance for local government pension accounts. In session where legislators have proposed plans that have drawn the ire of teachers, police and firefighter unions, the Senate proposal was greeted with a rare show of support.
“It’s a careful balance between the financial needs of some of our cities that are struggling now and the job that police and firefighters do,’’ said David Murrell of the Police Benevolent Association.
Also supporting the compromise was the Fraternal Order of Police as well as the League of Cities.
Under the bill:
• Unused sick leave may not be included in calculations of retiremeent benefits; overtime may be included but is capped at 300 hours.
• Money from insurance premium tax dollars may be used to fill the deficit in pensions accounts by creating a pay as you go plan.
• Cities must offer defined contribution “supplemental plans” by Oct. 1, 2011 but the measure does not prevent them from offering the traditional defined benefit plans.
• The Department of Financial Services must rate the financial strength of each city’s plan and cities must provide a fact sheet summarizing their retirement plans’ actuarial status.