City councilors are poised to offer a hefty cost-of-living hike to retired municipal workers.
Though the city has no obligation to raise pensions, the City Council this week unanimously agreed to adopt a one-time increase this year.
Councilors did not say how much the hike might be or how much more it will cost.
To push through the cost-of-living adjustment, which was first talked about last fall, the council had to adopt an ordinance allowing the move. Councilors did that this week.
It appears the council will soon give a green light to the pension hike that they considered in December, which would provide some retired workers as much as $4,200 more each year.
There are nearly 400 retired workers covered by the general city retirement plan, which is the one the council is eyeing to tap to pay for higher pensions.
Because the trust fund that covers the retirees’ pensions has a whopping excess of money, experts have said the inflation adjustments won’t crimp taxpayers and won’t jeopardize the city’s ability to make pension payments in the future.
It would, however, make it a little harder to snatch tens of millions out of the pension account to fill a new health benefits fund that someday will cover the health care costs of future city retirees. That fund needs more than $75 million.
The general retirement fund has more than $500 million, which is far more than actuarial professionals estimate it will need. The fund has grown so large since its inception in 1978 that taxpayers no longer have to make any annual payments to keep it up.
There are more than 30 city retirees who receive pensions of more than $50,000 annually and at least one who collects twice that.
The cost-of-living adjustments are likely to cover the last five years or so, with more recent retirees getting less than the full amount.
The proposal that councilors considered adopting a few months ago would add 75 percent of the annual cost-of-living increase to pension funds for each year back to 2002, the first time any pension hikes were given.That means that workers who were retired in 2002 could get up to 16 percent more each month if the council endorses the idea. More recent retirees would get less.City Treasurer Bill Veits said that workers who retired in 2005, for example, will get 5.58 percent more, or two years’ worth of cost-of-living adjustments.About two dozen retirees would get the $350 maximum monthly increase while five would get the minimum of an additional $10 a month.
The city offered a cost-of-living hike to its retirees once before, in 2002, without going through the trouble of authorizing the move with a specific ordinance.
One member of the council, Democrat Frank Nicastro, abstained on the issue. He receives a city pension for his 10-year stint as mayor and 17 years as a truant officer.
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