Brandon Twp.-Township officials are taking aim at the current retirement plan which they say may not financially afford retirement-eligible employees the ability to retire with a sufficient income.
The Brandon Fire Department has 13 employees with four eligible to retire in the next six years. The township administration has 22 full-time employees with five eligible for retirement in the next three years, say township officials
‘Right now we need to explore just what’s out there for our employees,? said Ron Lapp, township supervisor. ‘They can’t live on what’s currently available to them. They have given too much to this community over the past years. It’s just not right. The new plan will not cost taxpayers a dime more.?
A committee was established earlier this year to study the current retirement program and offer recommendations to township officials regarding possible changes. Trustees Charlene Carlson and Tom Stowell along with Brandon Fire Department secretary, Chris Fisher, and Brandon Fire Chief Bob McArthur studied the township plan. A work session regarding the changes in the retirement plan will be scheduled in June.
Under the current retirement plan the township contributes 12 percent of the employee’s salary into the retirement plan under Manulife, a Canadian-based financial services company. The fund allows a selection of several investment options for employees ranging from low, medium or high risk. In addition funds were also contributed by the township into the Retirement Benefit Fund, established in 2002 to help pay for retirees health benefits. The employee makes no contribution in the plan which requires 20 years of service and a minimum age of 55 for full vestment.
Under the new plan suggested by the committee, all township retirement funds totaling about $1,733,232 will be moved to the Municipal Employees? Retirement System (MERS) a statewide public employee retirement plan which offers both defined benefit and defined contribution plans which provides benefits to more than 65,000 members in more than 600 municipalities. In addition, about $700,000 will be transferred from the Retirement Benefit Fund to MERS in an effort to provide sufficient funding for township retirees.
The MERS plan will then receive the 12 percent township funding until it’s at 115 percent in about 3 years say township officials. The township will then contribute about 2.5 percent to the Retirement Benefit Fund, with the 9.5 percent going to MERS.
‘A firefighter would have to work until they’re in their 80s to have enough to retire,? said McArthur. ‘No one wants an old firefighter around. Even with 30 years plus of service,? says McArthur. ‘When we started the plan in the early 1980s we only contributed 2 percent. The fund grew since then but due to the stock market losses we just don’t have enough money in the fund to retire.?