retiree medical benefits
- The City Council will consider amended five-year contracts for public safety workers on April 29 which would go into effect in November if approved.
- The contracts establish a trust fund for retiree health benefits. The city would pay $7.5 million into the trust fund over 10 years; workers would pay between 2 percent and 4 percent of the top step of pay for their position into the fund over the next decade.
- The contracts also offer wage increases that would raise pay at least 9.3 percent and change pension payouts to reflect a safety retiree’s top salary, and not their top three years of pay.
The City Council will consider approving a plan Tuesday that would establish a trust to supplement newer firefighters’ pension and retiree medical costs.
Workers would fund the supplemental retirement and health plan by paying 3 percent of their salaries into a tax-exempt trust to supplement their existing retiree medical and pension benefits. The new trust will be open to fire department employees hired after June 7, 2011.
Approval of the plan would mark a shift in the way the city handles its employee pension and retiree health benefits while helping to restore benefits newer firefighters lost in a pair of recent contract deals – albeit at the workers’ own cost.
Members of the City Council said they want to set up a trust fund to help cover the city’s $86.4 million retiree health care liability. They just need to find money to put into it.
Funding ideas put forward by council members included savings from rolling blackouts of libraries and parks, unexpected windfall money and revenues from development at Alameda Point; additional suggestions could come from the city’s employee unions, whose leaders City Manager John Russo plans to engage on the issue over the rest of the summer.
“The goal is to have a plan, to put the city on a footing to follow this plan, rather than kicking the can down the road,” Mayor Marie Gilmore said.