Pension option weighed for Butler part-timers
Butler city council is debating on an amendment to its pension plan that would allow certain employees to buy service time for years worked as part-time employees.
Council last month directed solicitor Jim Coulter to prepare an ordinance that would amend the Officers’ and Employees’ Pension Plan to permit participating employees to purchase up to 3 years of service as part-time employees, provided they are age 60 or older and retire by the end of the year.
Employees get 50 percent of their wages per year if they retire after age 60 and have 20 years of full-time service. Employees with at least a dozen years of full-time service qualify for a prorated percentage of their wages.
Full-time employees contribute 5 percent of their earnings to the pension plan. Part-time employees are not eligible for pension benefits and do not contribute to a pension plan.
However, the request to retroactively buy pension coverage service for part-time years came from one employee this year.
If approved, the ordinance would allow the employee to make a payment equal what would have been paid in pension contributions during the part-time years.
While one employee requested it, three are eligible. Those three are: Fred Savannah, janitor, JoAnn Snyder, assistant zoning officer and Susan Evans, recently-retired administrative assistant.
The city would not say which of the employees made the request, nor is it known how many would take the offer.
Mockenhaupt Benefits Group, the city’s actuary consulting firm, recommended that the council should not open the window.
The retroactive pension payment would be about $6,000 total for all three employees. The move could cost the city an additional $9,100 per year if all three eligible employees opted into the offer. Employees are eligible for their pension for the rest of their lives following retirement.
Council said it would be a one-time window, but councilwoman Kathy Kline said it would set precedent for future employees not yet eligible.
Coulter said he would have to discuss with council the possible legal issues regarding the move, including possible precedent being set.
Kline voted to not even authorize Coulter to draft the ordinance at council’s meeting Aug. 27. She said she also opposes the idea due to the projected future costs.
Councilwoman Cheri Readie said she also opposes the idea.
“I’m absolutely against it,” she said. “There is no reason for the city to do it. All it would do is cost the city more money, which is distressing given the talk about the future finances of the city.”
Mayor Tom Donaldson and councilmen Richard Schontz and Bill May each voted to have Coulter draft the ordinance, but both said they would have to think about whether they would move forward with it when it’s on the table in September.
The city is set to pay about $30,000 in minimum municipal obligations for officers and employee pensions next year, as well as $186,000 for police and $183,000 for firefighters. The pension costs have been covered by state aid in recent years.
However, Readie said the added expense would not be covered by state aid.
