This move provides the municipality future savings and a more updated structure.
“We are just trying to keep it really simple. We’ll draw a line in the sand June 30,” Josey said. “We are behind the times having stayed with a defined benefit plan for so long.”
Swerdlin & Company serves as the city’s actuary, making sure the city complies with the IRS and does the best thing for employee benefits.
Senior consultant Julie Isom said the defined contribution plan offers some leeway.
“You have a lot of flexibility in the decisions that you can make related to those new people going forward,” Isom said. “Once you hire somebody and know they are staying awhile, you could let them in earlier.”
Elected officials fall under a separate pension plan. Appointed officials would switch to the match structure.
Josey said the current defined benefit plan would die out as city retirees mount.
“It won’t have a dramatic impact on the city’s budget immediately, but in 20, 30 and 40 years it will,” the city financial expert said. “It’s a way to sustain retirement into the long run.”
Council must approve the documents before any changes are finalized.
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