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City retirement benefits explained

By: Stephanie Dumm, News Messenger Reporter
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Miscellaneous city employees are eligible to receive 2.7 percent in pension at age 55 and public- safety employees can receive 3 percent at age 50. That’s according to the city’s human resources manager, Debbie Lindh, who told The News Messenger that this could change in the future for new employees hired on as miscellaneous and safety employees. Lindh said miscellaneous employees are city employees who don’t work for the police or fire departments, and dispatchers, community service officers and office supervisors in those departments would fall under the miscellaneous category. The News Messenger asked Lindh how much current retired employees are making in retirement benefits. She “wasn’t able to give a number because that information is available through CalPERS and not through the city of Lincoln,” and “a multitude of factors influence” retirement benefits for individual employees. Age, the number of years an employee has worked for the city, the years they have worked for another CalPERS agency, and what type of employee category they fall under all come into play when determining how much an employee will receive in pension, or retirement income, according to Lindh. “For the city of Lincoln, to be eligible to retire and get full benefits, they have to be vested,” Lindh said. “Vested is working at the city for five years, and just at the city of Lincoln, not at another CalPERS agency.” A CalPERS “agency” is an employer who provides retirement using CalPERS, according to Lindh. Miscellaneous employees who retire from the city at age 50 are eligible for 2-percent pension, with it increasing incrementally with age, stopping at 2.7 percent for employees age 55 and older. When the amount of pension is calculated for a miscellaneous employee retiree, their highest salary with the city of Lincoln is what’s used to calculate how much pension they’ll receive upon retirement for the Lincoln portion of CalPERS, according to Lindh. Lindh said other factors that influence how much a retiree receives in pension when they retire, such as if they have participated in buyback years or bought air time or both, according to Lindh, and if they have service years credit at another CalPERS agency. Lindh said the city is paying for the city’s portion of PERS right now, with miscellaneous employees paying 8 percent of their PERS and public safety employees paying 9 percent. The city pays 20.079 percent of CalPERS for public safety employees, and 14.366 percent for miscellaneous employees. “What CalPERS does with the money that’s paid towards pension is they invest it in the market,” Lindh said. “CalPERS invests it for us, and the profit they make from the investment is what they use to fund pension.” The percentage of annual income a retiree receives at retirement could be changing soon, since the city has proposed a new formula to employee labor groups via negotiation, according to Lindh, who said “every group in the city but the local 39 classified group has agreed.” The formula, which hasn’t been determined yet, would be less than 2.7 percent of an employee’s income at age 55. “It’s to respond to our current economic conditions, and we are proposing a new minimum retirement age and new retirement percentage as part of the retirement formula,” Lindh said. “After City Council action it would take three to six months for this to go into effect, and it will not affect current employees, it’s a future savings.” As far as health care coverage goes, city employees have to be vested with the city for five years, retire at age 55, and have to have worked a minimum of 10 years with a CalPERS agency to receive health coverage, according to Lindh. “At 10 years, an employee is entitled to 50 percent of what an active employee gets in medical coverage,” Lindh said. “Employees with 20 years or more in a CalPERS agency receive 100 percent of what an active employee gets.” The city will pay for the cost equal to Kaiser, according to Lindh, and if an employee chooses another more expensive plan they pay the difference.” “We are obligated as a city to pay a minimum of $64.60 towards a retired employee’s medical a month,” Lindh said, “which is due to the Public Employee Medical and Hospital Care Act.” For City Council members to receive healthcare benefits, Lindh said they must be “a minimum 50 years of age, retiring outside of CalPERS agency within 120 days of leaving office and have to be vested for five years.”