City Erects Second Retirement Tier for Staff

The city of Walnut Creek has added a second, lower-retirement-benefit tier for its employees.

The City Council Tuesday night unanimously passed an ordinance amending the city's contract with CalPERS (the California Public Employees' Retirement System) to enable the second tier, which takes effect for employees hired after March 2.

The city's costs will decrease as new hires come in with the lower formula, replacing existing employees who retire at the higher formula.

The city and its five non-police bargaining units in the last year negotiated a lower cost retirement benefit for new employees. Councilmember Cindy Silva thanked the employees for their willingness to work with the city in cutting retirement costs.

Resident Christian Herman said that, even with the reduced benefit, the retirement plan is "a pretty good deal" compared to the private sector. He asked that the city in the next round of negotiations explore the idea of shifting to a defined contribution plan.

The alternative would be to break free of the CalPERS pension system. Lorie Tinfow, assistant city manager, said the city estimated in 2009, based on contracts and retirement obligations then, that it would add liabilities of more than $50 by doing that.

"We have been as aggressive as we can be within the confines of the law," said Silva.