Township Amends Retirement for Some Future Hires
SANATOGA PA – In an attempt to reduce the township’s cost of retirement for future hires, Lower Pottsgrove’s Board of Commissioners has authorized creation of a defined contribution retirement plan for full-time, non-uniformed employees that became effective Feb. 1 (2021; Monday). No current full-time employees, or uniformed officers in the township police department, are affected by the change.
Commissioners voted unanimously, during their first meeting of the month, to amend what once was a defined benefit retirement plan. An advertisement about the board’s intent to change it was published earlier.
Township Solicitor Charles Garner Jr. said employees who earlier were covered by the defined benefit, which stipulates how and what they’ll receive as they qualify for retirement, still retain those rights. The defined contribution for new non-uniformed workers hired after Feb. 1, however, stipulates how much and when the township pays for retirement benefits, and not what employees receive.
The changes do not apply to future uniformed police employees, who are covered by a negotiated labor agreement.
Other businesses and municipalities that made similar changes have learned the savings can be substantial. If the price of providing a defined benefit rises, an employer may be contractually obligated to bear increased costs. The price of a defined contribution, on the other hand, usually does not rise unless the employer offers, or negotiates with employees for, a higher amount.
Employees in defined contribution plans also may be required to make payments themselves, as they will in Lower Pottsgrove.
The amendment will provide the township with better budget management and financial control, Garner said, and reduce “potential long-term exposure” to higher costs. Wagner and Garner publicly thanked the township pension committee and Joe Duda of Duda Actuarial Consulting Inc. for their help in researching, drafting and reviewing plan documents.
Garner observed the work had been tedious at times, in part because of the documents’ legal and financial language. “It makes for pretty stimulating reading,” the attorney joked with commissioners, “and you’ll be quizzed on it later,” he told them.
Also from the Lower Pottsgrove Board of Commissioners’ Feb. 1 meeting:
Township Amends Retirement Plan for Some Future Hires
422 Sound Barriers Considered in Lower Pottsgrove
Township Police Had Busiest January in Three Years
Bid Documents Needed for Township Municipal Campus
Update: Human Remains in Lower Pottsgrove Identified