City employees agree to higher pension contributions, but gain first wage increase in 3 years | May 24, 2013 | Pleasanton Weekly | |

Pleasanton Weekly

News - May 24, 2013

City employees agree to higher pension contributions, but gain first wage increase in 3 years

3-year contract cuts city's costs by $1.15 million

by Jeb Bing

The Pleasanton City Council approved a three-year agreement Tuesday night with the union representing 220 regular city employees that will raise individual pension contributions to 8% by the end of the year and reduce floating holiday hours while also granting a 7% wage increase over the life of the new contract, the first pay increase in several years.

Julie Yuan-Miu, assistant city manager and director of administrative services, told the council that the new agreement, which includes a package of reduced benefits for newly hired employees, will reduce costs for the city by approximately $1.15 million.

She said the agreement with the Pleasanton City Employees Association brings the municipal benefit and pension contribution plans in line with firefighters and police, who are represented by separate unions.

The council voted unanimously to approve the 55-page agreement, which had been accepted earlier by employee union members. The contract will take effect after the council ratifies the agreement at its meeting on June 4.

Individual pension contributions were raised initially to 2% in July 2011 at the same time a wage freeze was in effect due to the recessionary economy. Prior to that, the city paid all costs associated with police, firefighters and city employee health and pension benefits.

In December 2011, employees paid an additional 1%, and again last July added another 1%, bringing the current total contribution to 4%. The new contract raised that to 6% this month and adds another 2% in December, raising the individual contributions to 8%.

Also this month, employee wages will be raised by 2%, by another 2% in December, by another 1% in April next year, and by another 2% in April 2015.

In the new contract, employees will see their hours allowed for floating holidays reduced from 56 to 32. Floating holidays are similar to regular holidays but the hours are taken on a flexible basis and upon approval of a supervisor. The reduction of 24 hours is equivalent to approximately 1% of wages, Yuan-Miu said.

Employees hired since Jan. 1 also have reduced retirement plan benefits. The state's Public Employees' Pension Reform Act of 2013 took effect that date and requires that new employees who are enrolled in the California Public Employees Retirement System (CalPERS) for the first time have the maximum benefit factor of 2.5% at age 67 formula, a change from the former 3% at 65 benefit.

Also, in a new Retiree Medical Program, instead of medical coverage for two parties after retirement as current city retirees are now receiving, the new program covers the employee only and ends at the time those individuals become eligible for Medicare, which is currently 65 years of age.