Wednesday, October 03, 2012
RTM Passes Defined Contribution Plan
By James Lomuscio
Gary Conrad: Westport’s defined contribution plan more conservative than area towns. (CLICK TO ENLARGE) Dave Matlow for WestportNow.com
After more than a year of town discussions on ways to lower Westport’s future pension obligations, the Representative Town Meeting (RTM) tonight approved an amended 401K plan for employees and a new defined contribution retirement plan for nonunion employees hired since Jan. 1.
The amended 401K plan, which has $14 million in assets and aims to get employees contributing the day they are hired, passed unanimously and without much fanfare. Currently including 153 employees, it is retroactively effective as of Monday, Oct. 1.
The defined contribution plan for nonunion employees, however, had the RTM wrangling for more than an hour, with two failed motions to delay voting at the Board of Education’s request, until it eventually passed the plan by a 24 to 4 vote.
The plan, recommended by First Selectman Gordon Joseloff and Finance Director Gary Conrad, requires 3.5 percent contributions and allows for an extra 1.5 percent voluntary contribution, all 5 percent of which will be matched by the town, according to Conrad.
The initial draft of the defined contribution plan called for a 7 percent town match which was revised to 5 percent after the RTM’s Finance and Employee Compensation Committees recommended the lower number.
The 5 percent town match puts Westport at the low end of other towns surveyed, sad Conrad. Several speakers said this would help lower the town’s retirement obligations in the future while some others said it might mean losing potential good employees to communities with richer benefits.
The reason the vote took so long was that Jim Marpe, acting chairman of the Board of Education, asked for a postponement until his board could get answers concerning nonunion school employees that would take part.
“The Board of Education strongly supports the town’s efforts to have a defined contribution retirement plan,” said Marpe, adding that any plan has to be fiscally sound, “cost effective near and long term.”
But some RTM members argued that any further delay in the defined contributions plan, retroactively effective Jan. 1, 2012, would place a greater end-of-year financial burden on employees who have to catch up on contributions.
Three nonunion employees hired since Jan. 1 were in limbo because the defined benefit plan had been terminated and no new defined contribution plan was in place, proponents said.
In other matters, the RTM voted of 28 to 0 to 1 ratifying a collective bargaining agreement between the town and 25 members of Local 1303-194, Council 4, AFSCME, AFL-CIO.
The agreement covers for the period from July 1, 2011 through June 1, 2015.
To fund the agreement, the RTM agreed to appropriate $41,997 to the 2012-13 fiscal year budget.
The union includes Parks and Recreation Department, EMS, custodial and police vehicle maintenance employees.