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Hartford Pensions Still Too Generous

Hartford City Pension Retirement rules for non-union employees tighten, but remain lavish

Hartford Courant Editorial

February 01, 2011

The Hartford city council has finally applied long-needed restraints on the pension plan for non-union employees. The new plan will save money but not enough for a city staring at annual budget deficits. Real savings won't occur until the city can bargain for more realistic pension rules with city employee unions.

Under the old plan, for non-union employees hired before Jan. 1, 2011, the laughably loose, expensive rules allowed workers to retire after 20 years of service, or in some cases 25 years, regardless of age.

They would begin immediately to draw benefits even if a worker was only 38 or 40 years old. The city would be on the hook for paying benefits the rest of the employee's life including lifetime health benefits in many cases.

Under the new plan, approved by the council in January, non-union city employees hired on or after Jan. 1 this year must wait until age 55 to collect a reduced benefit and until age 62 to draw a full pension.

Also, pension payments for those hired on or after Jan. 1 will be calculated using a factor of 1.75 percent of the final average pay, instead of 2.5 percent, and employees will no longer be able to exchange accumulated sick time for more years of service when figuring retirement benefits.

Compared with the old plan, the new rules are more rooted in the real world, and somewhat more in tune with the private sector and federal entitlements except that companies are doing away with defined benefit pensions.

Yet the new Hartford plan is still too generous. Why shouldn't a city worker wait until age 65 to collect a full pension benefit? Why not switch new employees to a version of 401(k)s common in the private sector? That was the recommendation of two city council task forces appointed last year and nearly a decade ago. Given the economic tsunami heading toward cities and states, the current public-sector pension system is unsustainable.

The new Hartford plan, in any case, should be modified to cost the city less. For example, using overtime in the calculation of pension benefits, as police officers and a select few other city employees are allowed to do, should be eliminated. And elected officials shouldn't be allowed to participate in early-retirement programs. If they want to quit midterm, fine. But they shouldn't be paid to do so.

The city of Hartford and other governments can't afford the gold-plated pensions and benefit packages of the past.

Reprinted with permission of the Hartford Courant. To view other stories on this topic, search the Hartford Courant Archives at http://www.courant.com/archives.
| Last update: September 25, 2012 |
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