Police officers and firefighters hired by the city of Atascadero after July 14 will have to work five more years before they get retirement payouts, in contrast with their peers who previously negotiated payouts at age 50.
Giving less generous benefits to future public employees is a trend that has been spreading statewide. In San Luis Obispo County, almost all seven cities, and most county employees, started adopting such plans beginning last year.
In Atascadero, the move is one more step in a long line of concessions that employees and executives have made to help the city ride out the recession.
Employees have continued to work leaner in recent years to help the city, said Dean Pericic, president of the Atascadero Professional Firefighters Local 3600.
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New hires with the city who are not sworn safety personnel will keep their retirement age at 55 but will receive a half-percent less in annual pension contributions from the city.
Also, payouts for all new employees will be based on the average of their three final years rather than their most highly paid year.
It is not yet known how much the changes outlined in the city’s new two-tiered pension plan — unanimously approved by the City Council on Tuesday — might save the city.
“As current employees leave or transfer or retire, eventually all employees will be on this new tier. But all that depends on turnover,” said city finance director Rachelle Rickard.
The total percentage that pensions represent in the city’s overall budget wasn’t available.
Atascadero has been talking about pension reform with its four unions and other employees for about a year.
“Overall, the cost savings for the city for new hires with the new formula should have little negative effect to our department or the employees,” said Atascadero Police Association President Scott Pipan.
With more police officers working into their 50s today, the two-tier format is soon to become “the norm for most cities in the state,” Pipan said.
The changes adopted Tuesday won’t affect current employees, although they, too, have helped the city save. The last round of concessions, adopted last year and in effect through 2013, will generate savings of nearly $300,000 annually in the general fund.
All 116 full-time employees agreed last year to eliminate their cost-of-living pay raises. Employees haven’t received raises since July 2008. The city’s nine department leaders have the option to cut their salaries, on top of not receiving raises, from 1 to 3 percent through 2013.
Last year, six of the managers opted for the 3 percent cuts while the others chose 1, 1.5 and 2 percent cuts. Executives have also taken cuts with unpaid furloughs in the past.
Current staff and executives also agreed to direct 4.7 percent of their take-home pay toward pensions through 2013. In the past, they paid less, but the amounts varied depending on their jobs.