Age to re­tire might go up

City looks at changes for new work­ers to fix pen­sion fund

Austin American-Statesman - - FRONT PAGE - By Sarah Cop­pola

To bol­ster its largest, ail­ing pen­sion fund, the City of Austin might re­quire fu­ture em­ploy­ees to work longer than cur­rent em­ploy­ees must to re­tire and col­lect a pen­sion.

City bud­get of­fi­cials haven’t set­tled on a fi­nal plan but are rec­om­mend­ing that all fu­ture work­ers, ex­cept for po­lice and fire­fight­ers, be age 60 to 62 with 30 years of ser­vice or age 62 to 65 with five years of ser­vice be­fore they can re­tire with full pen­sion ben­e­fits. Cur­rently, em­ploy­ees must be age 55 with 20 years of ser­vice, age 62 with five years of ser­vice or any age with 23 years of ser­vice.

Those gen­er­ous for­mu­las — along with a rocky stock mar­ket — have strained the city’s biggest pen­sion fund and made it tough to re­tain long­time, highly skilled em­ploy­ees, city of­fi­cials say. About 15 per­cent — 600 to 800 — of cur­rent re­tirees who were not po­lice or fire­fight­ers were younger than 50 when they re­tired.

“Our cur­rent (pen­sion) terms are much more gen­er­ous than other lo­cal gov­ern­ments, and we can no longer af­ford them,” said City Coun­cil Mem­ber Bill Spel­man, who sits on the pen­sion fund’s board. The changes be­ing weighed “will help cure the prob­lem with­out shift­ing the (pen­sion) terms too much for em­ploy­ees.”

The city also plans to add an ex­tra $9 mil­lion to the pen­sion fund each year for the next three years. Aus­tinites will foot that bill; the money will come from fees that res­i­dents pay for util­i­ties such as wa­ter and elec­tric­ity and from prop­erty taxes, sales taxes and devel­op­ment fees that fund most city ser­vices, such as parks, li­braries and po­lice.

Be­low are el­i­gi­bil­ity rules for the pen­sion sys­tems in large Texas cities and the state. The ages and years of ser­vice listed are the min­i­mums re­quired.

We chose a hy­po­thet­i­cal em­ployee – age 60 with 30 years of ser­vice, re­tir­ing at a salary of $50,000 – and cal­cu­lated the pen­sion ben­e­fit us­ing each sys­tem’s for­mula. There are other vari­ables in each plan that might af­fect the com­par­i­son. Austin – cur­rent rules Age 55 with 20 years of ser­vice Age 62 with five years of ser­vice Any age with 23 years of ser­vice An­nual pen­sion for the hy­po­thet­i­cal em­ployee: $45,000 Em­ploy­ees can buy up to five years of ser­vice time to re­tire early. Austin – new rules rec­om­mended for fu­ture work­ers

Age 60 to 62 with 30 years of ser­vice

Age 62 to 65 with five years of ser­vice An­nual pen­sion for the hy­po­thet­i­cal em­ployee: $34,500 to $37,500 Em­ploy­ees could re­tire early, with re­duced ben­e­fits. Dal­las

Age 60 with any num­ber of years of ser­vice Any age with 30 years of ser­vice Age plus years of ser­vice equals 78 (only work­ers who are at least age 50 are el­i­gi­ble for this) An­nual pen­sion for the hy­po­thet­i­cal

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.