RTM Okays Police Pension Plan

With the aim of stabilizing police pension costs, the RTM approved a change in the town’s police pension plans for new hires from a defined benefit plan to a defined contribution plan. 

Under the new agreement, the town hopes to keep police pension costs at a sum of just under $1,000,000. 

“With the financial constraints the state and towns are facing, we’re seeing more of a movement to the defined contribution plan,” said Kevin Maloney, spokesperson for the Connecticut Conference of Municipalities..  “There are more and more towns moving in that direction . . . . The towns have been doing this for the last five or six years,” he said.  

To date, more than 50 of Connecticut’s 169 municipalities have adopted defined contribution plans. 

Sandra Reiners-D, the chair of the Ways and Means Committee who had prepared a summary of the 10-year agreement, termed the defined contribution plan “a logical way to proceed for many towns.” 

She said this style of plan originated in private industry in the 1980s.

For new hires, the town will contribute five percent of an officer’s salary and the employee will contribute 8.5 percent.  New hires will direct the investments of proceeds individually, according to the summary of the agreement, and also gain more flexibility in the investments they choose (Branford Police Department will have its , the third female on th force, join the Department tomorrow, Aug. 12 as leaves).

“The agreement seemed fair to the current and newly hired beneficiaries while eliminating the risk for the Town of a guaranteed future benefit payment,” the summary reads. 

Like the committee, the full RTM approved the agreement unanimously.

The plan raises the contribution of an employee hired before RTM approval from six to 8.5 percent, with the amount of benefits increasing from two to 2.5 percent of an officer’s base salary multiplied by the number of years worked.  The sum tops off at 70 percent of an officer’s salary – this, up from a previous cap of 66.67 percent.  A police officer hired before RTM approval of this agreement would reach the maximum rate of pension in roughly 28 years.

The new agreement will pay new employees $700 towards their own purchase of disability insurance.  For those hired before RTM approval, the plan eliminates the previous cost-living-adjustment clause.

Reiners said she expected to post a copy of the agreement on the town’s Web site this week.