The Morro Bay City Council has reduced its retirement contribution to newly hired firefighters in an effort to curb budget shortfalls.
The council reduced the city’s contribution from nearly 35.2 percent to 15.6 percent. The county began using a two-tier pension system for new hires at the first of the year, and this is the first city in the county to have done so.
“While there won’t be a significant fiscal impact at the outset, by virtue of the change of retirement formula, the city will see substantial savings as we hire new employees to replace our existing employees who either retire or move on to other agencies,” said Susan Slayton, city administrative services director.
The council tentatively approved the reduction Jan. 25 and finalized it Tuesday. The City Council’s goal is to implement similar pension changes with other city employees, Mayor Bill Yates said.
Morro Bay has been hit harder by fiscal restraints than other cities due to reductions in commercial fishing and use of the Morro Bay power plant, two historic funding sources.