Legislation planned for introduction into the Montgomery County Council would ultimately save the county millions of dollars annually while reducing retirement benefits for some of the county's 7,000 employees, officials say.
The legislation would not reduce retirement benefits of any current county employees but it would reduce pensions of some people hired after the legislation becomes effective, personnel officials say.
It was proposed by the county personnel board and probably will be introduced in September. Officials estimate it eventually could save the county $3.5 million a year. Much of the savings would come into effect in about 30 years when all of the beneficiaries are receiving the lower benefits provided under the proposed legislation.
Among other things, the legislation would lower the age for possible retirement for public safety employees, reduce the possible cost of living adjustment for most beneficiaries and change the method of computing benefits.
According to Charles Ward, chief of the county's employment services division, the proposed legislation "resulted from unanticipated double-digit inflation and perceived inequities in the law."
When the law was revived in 1972, the cost-of-living adjustments for beneficiaries was increased, and the base period for benefit calculations was changed from the averaged of the highest three years to the highestyear.
Ward said that because of inflation in the succeeding years, personnel administrators feared that eventually the county would not be able to pay for the plan. Hence, the move for revision, including changing the base period back to the average of the highest three years.
At a recent public forum at Wootton High School on the proposed legislation, the revision discussed most was the one concerning lowering the early retirement age for public safety employes.
Currently public safety employees can elect to retire early if they are at least 45 years old and have 20 years of service.
The legislation would lower the age requirement for early retirement to 41 years with 20 years of service.
Testimony by police and fire department representatives at the forum indicated that public safety officers would rather be allowed normal retirement at age 41 with 20 years of service, as recommended by County Executive James P. Gleason. Benefits are higher under normal retirement than early retirement.
Endorsing Gleason's recommendation, Police Chief Robert diGrazia said, "Policing is a young person's game.A 20-year retirement plan will have a dynamic effect on the vitality and quality of police service for many years to come."
Referring to his experience as Boston's police chief, diGrazia said, "I had to put up for four years with a department where the average age was 48. The type of policies that arose consistently because of the average age of these officers, I would not want to see repeated in Montgomery County."
DiGrazia added that he would not specify those polices because, "I do not want for you to see a grown man cry and I mean that literally."
Other safety representatives argued for the lower retirement age by saying that because of job conditions police and fire officials have life spans 15 years shorter than persons in other professions.
James Dennis, who represented the Fraternal Order of Police Lodge 35, said, "I came on this job at age 21. After 20 years of police work I am tired. I feel if a man comes on the job at age 21 and gives 20 years, why would anyone want to reduce (his pension for retiring early?"
Besides the lowered retirement age for public safety employees, there are three other revisions designed to work to the employees' advantage. They are: changes in the disability retirement requirements; optional benefits for surviving spouses of certain employees elegible for pensions, and an optional program for elected officials.
One change in the disability retirement requirement increases the minimum benefit for service connected total disability from 50 per cent of final earnings to 60 per cent. In addition, non-service connected disability retirement would become effective on the date approved by the county retirement hearing board instead of after all the excess sick and compensatory leave is used, as under present practices.
Under the option for widows and widowers of vested employees, or those eligible for pensions, the surviving spouse of an employee who was not of retirement age could elect to receive the money the employee paid into the system or wait until the year when he or she would have been eligible for retirement and then receive a pension. Now surviving spouses of employees who die before retirement age cannot elect to receive pensions unless the employee was eligible for retirement when he or she died. They can only receive the money the put into the system.
A deferred compensation plan would be offered for some elected and appointed officials. They could choose to invest parts of their salaries in interest bearing accounts that are taxable only after they start withdrawals. The program is offered as an alternative to the officials because many do not stay on their jobs the five years necessary for pension eligibility.
Personnel officials say 25 people would be eligible including the county executive, chief administrative officer, department heads and heads of principle offices. Council members would be ineligible.
One change would result in reduction of funds only for employes who leave the system and opt to withdraw the money they contributed toward retirement benefits. Under that change, contributions to the retirement fund would stop bearing interest after five years when the member becomes eligible to receive a pension upon retirement.
Other changes which would result in reduced payments for future county employes include:
A change in the calculation of the cost-of-living adjustment so that members would be eligible to receive only 60 per cent of the cost-of-living adjustment, up to a maximum of 3 per cent a year. They now get a 100 per cent adjustment. Besides the current county employees, exemptions would include disabled members and members over age 65.
Giving credit for military service only to those employees required by law to enter the military. Currently all persons who served in the armed forces can have up to four years of military service credited towards their experience as a county employes, thus increasing their retirement benefits.
Under the proposed legislation it would no longer be possible for the credit union to take loan payments out of benefit payments.
At the forum, Ernest Walz, president of the credit union, argued the change would make credit union loans harder to get for high risk persons and could raise loan interest rates.