The current Plan 4 benefit for existing General Plan Members is 2%@55.5. Under the new agreements, General Plan Members hired on or after August 7, 2011 will not receive that benefit but instead will receive 1.725%@58. Employees in this plan will not pay the current cost share contribution, but will pay a share of the COLA cost. New General Plan members will continue to have the option of enrolling in Plan 3, the non-contributory plan.
Deputy Sheriff Association (DSA) has agreed to a different retirement benefit for new hires that requires enactment of legislation (with a tentative effective date of January 1, 2012). The current Plan 4 benefit for existing Safety Plan Members is 3%@50. Under the new agreement with DSA, new DSA members hired on or after January 8, 2012 will not receive that benefit but instead will receive 3%@55. Under this option, new DSA members will pay the current cost share contribution as well as a share of the COLA cost. New DSA members will continue to have the option of enrolling in Plan 3, the non-contributory plan.
Under the new agreement with OSS, new OSS members hired on or after January 8, 2012 will not receive the 3%@50 benefit, but will instead have the option of enrolling in one of two other retirement plans: 2%@50 or 3%@55. Members choosing the latter formula will pay an additional cost share contribution. Under both options, new OSS members will pay a share of the COLA cost. New OSS members will continue to have the option of enrolling in Plan 3, the non-contributory plan
The above-described changes constitute reductions in benefits for new hires. Based on a review by Milliman Inc., the actuarial impact of this benefit change is noted in the table below. Given that it is not possible to estimate which retirement plan option new OSS hires will choose, savings for both options are provided. However, it is important to note that the difference in cost savings between the 2%@50 and 3%@55 with cost-share is actuarially very similar.
Cost Savings for New General Plan as compared to 2%@55.5
1.725%@58
Y1 Savings: $121,000
Y10 Cumulative Savings: $25,448,000
Y20 Cumulative Savings: $113,330,000
Cost Savings for New Safety Plans for OSS as compared to current 3%@50
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