Pension reform to reduce unfunded liabilities
To the editor:
It is surprising that little has been heard concerning pension feform in Portsmouth. Recent contract negotiations with Council 94, non-professional employees of the School Department, has resulted in a significant reduction in unfunded liabilities for the citizens of Portsmouth. What is perhaps most remarkable is the way in which the union concessions were achieved; through contract negotiation. Other similar reductions in unfunded liabilities throughout the state have been accomplished through implementation and will likely wind up in the courtroom.
Although difficult and lengthy, the contract was negotiated to retain benefits acceptable to the union members and at a sustainable cost to the taxpayers. The lion’s share of the work on behalf of the School Department administration was carried out by Jonathan Harris, vice chairman of the School Committee. In the final vote by the School Committee, all members voted in favor of the new contract with the exception of David Croston.
Details of the contract include:
- Employees covered by the pension plan prior to July 1, 2012 will retain the pension benefits they have earned from their original date of employment.
- Beginning on July 1, 2013, pension benefits for this group will accrue on a going-forward basis at 1% per year rather than the current 2.5% per year. These employees will also receive a 3% annual 401K style contribution from the school department in addition to their pension plan.
- Cost of living increases will also be paid to retirees but in the future they will be delayed until after the fithyear of retirement.
- New employees hired after July 1, 2012, will not be in the town pension plan. They will be enrolled in a new retirement plan, similar to a 401K plan, where the school department will contribute 8% of an employee’s salary and the employee will contribute 8% of his/her salary.
The School Committees leadership in this area is a model for our town and other towns to follow. Additionally, by negotiating pension reform the School Committee prevented an additional $200,000 of pension funding costs which would have taken more funds away from the core mission of educating children.
H. Weber Wilson