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Waterford Board Complains of “Ridiculous” Municipal Retirements

Board sends letter to state asking legislators to change the retirement benefits of municipal employees.

Wednesday night, for at least the third year in a row, the Waterford Board of Finance agreed to send a letter complaining to the state about town employees' retirement plans, calling the retirements “unsustainable” and “completely out of whack.”

“This whole thing is completely out of whack,” Board of Finance member Alan Wilensky said. “What is fair is fair, and this is ridiculous.”

The board’s gripe is from the increases in cost of retirement for town employees under the state-controlled Municipal Employees Retirement System (MERS), of which Waterford is part. The problem with the system is two-fold, according to the Board of Finance’s letter: towns are continually forced to pay more, while the employees share stays the same; and overtime is being factored into retirement benefits, and they argue only base salaries should be used for factoring retirements.

“Our board feels strongly that municipal fringe benefits should align to those in the private sector, especially since municipal employees’ wages are now equal to or better than those in the private sector,” Board of Finance Chairman Ron Fedor wrote in the letter.

The Complaint

As late as 2004, towns would contribute 3.75 percent of a municipal employee’s salary, and 4.25 percent of salary to fire or police municipal employees, to their retirement to fund MERS, and the employee would contribute 2.25 percent.

In the past eight years, the taxpayer’s percentage has increased drastically, while the employees’ contribution has stayed flat. This year, taxpayers will contribute 11.79 percent of a municipal employee’s salary to retirement, and 16.65 percent of salary to a fire or police municipal employee, while the employee still contributes just 2.25 percent.

“Over the past several years, the Town of Waterford has experienced a tremendous budgetary increase in the cost of providing retirement benefits as a member of (MERS),” Fedor wrote in the letter. “The Waterford Board of Finance has been forced to grapple with funding these increases annually, sometimes at the expense of its service level.”

Wilenksy argued the employee share and the employer share should be the same, like it is for Social Security. He successfully lobbied Wednesday night to put in the letter that the town’s share should continue to go down and the employees’ share should continue to go up until they meet.

The board also agreed that pensions should be based off of base salaries, not salaries after overtime.

Other Options

First Selectman Dan Steward said it is hard for the town to get out of MERS and said he would get a legal opinion to see if that is even possible. Board of Finance member Norman Glidden said rather then sending a letter and complaining, the town should slowly get out of MERS.

“I think it is a failing system,” Glidden said. “It is a system that puts us in-between a rock and a hard place and keeps squeezing.”

Board of Finance member Mark Wiggins agreed, saying if the town doesn’t start working on it now, it will never happen. Both men agreed that the town should leave existing employees’ benefits alone, but try to get new employees to have a defined contribution plan instead of a defined benefit plan or a 401K system.

“It is a big effort, so what, do it,” Wiggins said. “What’s the alternative to it, just sitting here and complaining about it for the next 10, 20 years?”

How Lucrative Is The Plan?

MERS is based on of the number of years the employee worked and the last three years of salary, including overtime. The last three years of salary earned by the town employee are averaged together. Then for each year a town employee works, the employee collects 2 percent of that average.

For example, if a town employee made $75,000, $80,000 and $85,000 in his or her last three years, and worked in the town for 30 years, he or she would collect 60 percent of $80,000, or $48,000 a year for the rest of his or her life. That number increases over time for cost of living.

The percentage is capped at how much you can collect. In most contracts, you can’t collect more than 75 percent of your salary, which would be achieved after working 38 years.

David Irons December 16, 2012 at 07:35 PM
Paul Petrone, Ron seems to throw out numbers that don't stand up when the light is cast on them. Can you please respond to the numbers he claims here? I doubt they will stand up either.
Casey December 16, 2012 at 10:37 PM
David - I am absolutely certain that Ron was trying to make the point that the pensions being paid are very high when he used his Hope Diamond comparison. I know for a fact that there is a significant number of retirees that receive well above $200K . Last year the award for highest pension paid went to a retired UConn professor and he is getting more than $$250K. The entire list of retirement amounts is available on-line
ZIGGY December 17, 2012 at 07:49 PM
Jealousy!-----keep doing what you're doing & you end up on here---funny isn't it---get a life or better yet----one of the jobs you're cryin about---tsssk tsssk
Joe/Ct December 25, 2012 at 06:25 PM
As a retired federal government employee, I am flabergasted by the low contribution of the state and local government employees to their retirement system. We contributed 50% of the cost, equivalent to the that of the federal government. Also, as I recall, the three-year average did not include overtime. All government retirement systems should be equalized. Also, not under discussion, are health care contributions. As with the retirement, we contributed 50% of the health care costs. I'm sure that the state and local government employee contributions is nowhere near that.
CU Seaside February 28, 2013 at 09:58 PM
Are we surprised that David Irons is complaining about State and Municipal officials and their retirement benefits? Mr Irons does not mention that he did not contribute one penny to his double dipping retirements. Neither does anyone mention that the reason the State Retirement Funds are in trouble is that the leaders of both parties never kept their bargain and deferred payments to the fund. The State Retirement Fund was actuaraly. Its The Republicans and Democrat leaders who created the current problem.

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