Following the full completion of the voting process, the City has been permitted to release details of the voted-down pension reform proposal it offered to the city’s largest labor organization, the International Association of Machinists (IAM).
The proposal, rejected by its voters late last week, would have extended the contact through September of 2014 and included having members return a large portion of an upcoming raise to increase their share of cost without reductions to current take-home pay.
IAM’s outgoing contract includes a 7 percent raise that will be distributed on October 1, but the proposal requests that 6 percent of the raise be returned to the City to cover their cost of pension benefits. In this scenario, employees still receive a 1 percent raise and no one would take a pay reduction while still maintaining full benefits.
Another part of the reform heavily focused on new employees.
Currently, all newly hired IAM employees receive a pension of 2.5 percent of pay for every year worked, with the ability to retire at 55. Under the proposed reform, new employees would get 2 percent of their salary at retirement for each year worked, but must wait until the age of 60 to retire. A new employee who works for 30 years, for example, would receive 60 percent of their salary (30 years multiplied by 2 percent of pay) following retirement instead of 75 percent that would be received currently.
The City’s proposal would not change any pension benefit amounts for current employees and yet estimated a savings of $3.9 million, which they say would go directly back into the general fund (though the proposal did not elaborate on where, specifically, the money would be spent).
Other details included a one-time $1.5 million payment to be allocated among the IAM’s 3000-plus members as well as an agreement that the City Council would not initiate placing pension reform on the ballot if the proposal were to be accepted.
IAM representatives have not yet returned requests for comment.