With most salaries already froze for Springfield Township employees, a cut to their 401K plan is now on the horizon with discussion of other cuts lingering in June.
Springfield board members voted unanimously at their May 11 meeting to reduce the township’s contribution to employee 401K plans by 2.5 percent and cap contributions to future employees to 2.5 percent. The reduction in benefits for current employees is effective Jan. 1, 2007, while the reduction for new employees takes place immediately.
According to a memo from Township Supervisor Collin Walls to the board, reducing the township’s contribution from 7.5 percent to 5 percent would save approximately $20,925 in expenses in the general fund, fire department, parks fund and building department fund.
‘It is a very unfortunate fact of life that the most expensive portion of the township operation where we have any control at all over expenditures is in wages and benefits. I sincerely believe that we must do something to control our costs in this area as much as possible. We have and should continue to explore opportunities for increased efficiency and cost reduction,? stated Walls in the memo prior to the discussion.
During a phone interview, he highlighted not filling a vacancy in the Assessing Department and better utilizating of township vehicles as examples of efforts to reduce costs without making cuts to current employee benefits.
‘I think that 7.5 (percent) is very generous. I think 5 percent is still very generous,? said Treasurer Jamie Dubre at the meeting. ‘I do think we need to give fair notice to our current staff.?
‘For most people, the 401K is a future kind of thing. Most people don’t think about the retirement benefit until they get to retirement age,? said Walls, noting the 7.5 percent was high in his opinion, for a small employer like the township.
‘It’s also the most equitable,? said Clerk Nancy Strole at the meeting. ‘I think we should focus on trying to get our reductions primarily through the 401K. We can talk about medical. I’m open to that especially with new hires, but if you get in situations where by our current employees are either asked to pay for the second person, be it a spouse, or pay a flat (fee)? It’s like taking a pay cut’What do we do about those employees not affected by that.?
‘As far as I’m concerned, it’s a mistake for the township board. We have a lot of township contractors who haven’t taken a pay cut. They’re not asking them to take cuts, so why ask me,? said Fire Chief Charlie Oaks during a phone interview.
‘Every time they ask for a cut, it’s always the little person. If they want to cut for new employees that’s fine.
‘I try to run as tight a budget as I can. I’ve never asked for any pay increase from the township’They should cut some outside expenses (instead).?
While the board discussed medical benefits as well, action was only taken on the 401K plans.
Discussion on employee medical benefits were tabled, but Walls said the topic will be on the next meeting’s agenda on June 8.
‘We’re throwing out a lot of good ideas. For me there’s no rush, these are significant decisions. I’d like to sleep on it,? said Strole before the issue was tabled.
‘If something doesn’t change with the cost of medical insurance, we’ll have to begin at some point having employees contributing to the cost of insurance,? said Walls.
While Walls and the board stressed concern about making cuts to affect current employees, they were more open to making restrictions for new employees.
‘I do not see a problem changing the township cost for medical in the manner in which we do that with employees for new hires because when they are hired they know exactly what they are getting into and (we’re) not changing the rules of the game,? said Walls.
The next township board meeting is at the Civic Center on Davisburg Road on June 8 at 7:30 p.m. (Note: Trustee Dennis Vallad was not present at the meeting.)