Under the agreement, still to be ratified by the Representative Town Meeting, employees hired after April 1, 2011, would be placed in a 401(a) plan, according to The Minuteman newspaper. The present negotiated agreement states that employees must contribute at least 4% of their salary into the plan, but employees can contribute more, up to the maximum allowed by law. The Town will match up to 5%, and the Town’s contribution will vest after five years.
First Selectman Ken Flatto said there are health insurance give-backs that will make the cost to the town much lower. Flatto told The Minuteman that while the salary increases total 8% in three years, the cost to the town is more like a 4% to 4.5% because the employees have to pay increased amounts for health care benefits.
Salary increases start at zero percent for the first six months, then change every six months after that at rates of 1.5%, 2.5%, 0.5% and 3.5%, respectively. The last increase is good for the entire last year of the three-year agreement, which extends retroactively from July 1, 2010, through June 30, 2013.
Last year, after suffering a $42-million loss in the Bernard Madoff ponzi scheme, town officials proposed a spending plan that included a nearly $1.6-million pension funds allotment (see CT Town to Release Pension Funding Plans).
« Malaysia to Launch Private Pension Scheme