Marisa Brown

This week, The Pension Advisory Group was presented with the costs associated with the restoration of some of the retirement benefits that were cut during the 2011 Pension Overhaul.

Some of the proposals that offer a “PROSPECTIVE” increased accrual or cola restoration amount to just another layer of cruel and unusual punishment.

The group of employees and teachers who suffered the greatest financial loss under the 2011 reform fell just shy of 20 years of service on July 1, 2012. Their annual accrual amount was reduced to a 1% defined benefit accrual at a time when these longer serving employees were on schedule to enter their highest accrual levels.

The supposed offset 401k plan served to minimize the cuts to the defined benefit plan but given the older age of this group, there was not enough time for their money to grow.

The consulting actuaries should have never let this happen in 2011. And God knows they cannot let this Working Group consider a Prospective increase to the DB accruals. How can this be? This prospective scenario would provide a new employee with a better retirement plan than a current employee with 32 years of service! What?

It’s no different than contemplating a PROSPECTIVE Cola. You would allow all retirees access to their cola on July 1, 2024 regardless of whether they have been retired for 3 or 8 or 15 years? So the retiree who has been out the longest without a cola will not get those lost cola years back yet the more recent retirees will begin collecting their cola on schedule? How is that ok?

Please ask questions, lots of questions …and if there is to be any partial restoration of benefits please do not accept anything short of an equitable solution from your expert actuaries.

Submitted via online webform