UAGE meets with Director of Utah Retirement System

UAGE Staff and State Board of Directors meet with the Director of the Utah Retirement System on September 17, 2009.

The changes to the Utah Retirement System (URS) began with the announcement that over $4 Billion had been lost through investments in 2009.  This is significant for every public employee to take note of for there are Utah State Legislators who have been trying to change the URS to a “Defined Contribution” system which would give the employee a 401 (k) instead of the current Defined Benefit System. What would be the status of the Defined Contribution if this had been allowed to occur?

At the Legislature’s Interim Retirement Committee meeting on September 9th, 2009, the Committee staff announced the loss was closer to $6.5 Billion.  At the UAGE meeting on the 17th, Mr. Newman said the loss is at $5 Billion.  His next remarks were telling – that in an overall system as healthy as URS a $5 Billion loss is a lot.  There are some who believe that a major change to the system is not warranted.

Mr. Newman said that there is an 18 month lag between initiating a contribution rate and actually realizing revenue but he said there was not a way to “invest our way out of this”!  There will be a contribution rate increase imposed upon the state and local governments to help make up the difference.  Most jurisdictions say they are unable to incorporate the increase so Legislators are looking at ways to change potentially expensive components of the plan.

Well, that’s how it started.

Here are a few of the options being studied for consideration of a final Legislative approach for the 2010 session:

Suspend or Lower Post Retirement contributions to 401(k)

Utah currently has one of the best post-retirement benefit policies.  There is political momentum to change the benefit for employees who “double dip” to save money.  The concern is whether or not any changes can be legally made to the current employees using the post retirement benefit.

Extend final Average Salary Period

The proposal would allow the salary averages of the highest 5 years to be used in calculating your benefit instead of the top 3 years.

Make COLA’s Discretionary/Delay COLA

COLA’s on retirement disbursements could potentially be deferred until a specific anniversary date has been met – like 3 years after retiring – or until a retiree reaches a certain age ( ex. 65).

Increase Vesting Period

Vesting period for new employees could increase from 4 to 6 years.

Put a minimum age condition on the 30 year benefit

One of the suggestions is to change the minimum age that an employee can retire without a penalty (55, 57, 60, 65).  More discussion will reveal whether current employees would be grand fathered.

Partial benefit payments until a certain age

The proposal would allow for an employee to receive partial retirement benefits until they reach a certain age – a form of phased retirement.

Reduce the multiplier

Reducing the retirement multiplier (currently number of years x 2% x 3 highest average salaried years) from 2% to 1.9%.  Again, no answer yet on whether current employees would be grand fathered.

Increase 20 year public safety and fire fighter requirement to 25 years

Again we have the unknown factor of whether current employees will be grand fathered.

Put a minimum age condition on the 20 year public safety and fire fighter benefit (48, 50, 52…).

This proposal would change the minimum age that employees can retiree without penalty.

Change back to the contributory system.

Allows employees to participate in funding their retirement benefit but introduces a shift of some of the risk to the employee.

Create a hybrid contributory/non contributory system

This would allow the system to potentially have the employee participate in funding their retirement benefit while still having part of their benefit made up of the non contributory system.  For example, employees might contribute 1% – 3% of their own salary to the plan.

Make the retirement benefit option – employees can choose how they would like to participate at the time of hire.

Change the defined benefit system (DB) into a defined contribution (DC) 401(k) system.

Base retirement eligibility on age + years of service

This is patterned after the “rule of 85’ – requires you to have 30 years of service if you plan to retire at the age of 55 = 85.  This has proven extremely expensive in past reviews.

The League of Cities and Towns held several meetings with employee organizations, cities and small jurisdictions over the summer.  Their recommendation was to return to the Contributory System that the Legislature abandoned in 1986.  Legislative leadership at that time felt the Non Contributory System would make the system healthier.

What we may see is a hybrid between the Non Contributory System we have now and the new Contributory plan. An interesting challenge the Legislature has is whether to introduce a new plan into a career that’s already begun, meaning can they do anything different with your plan if you are already in the system?  Some indicate, “Yes” as long as the impact is equal on everyone.  There is some talk to draw a years of service line, say eighteen years.  Everyone over that time would be grand fathered and stay in the Non Contributory System – those under could be subjected to a new choice.

URS is currently 83% funded.  Utah’s public employees have a retirement system in much better shape than some others.

One of the most important things readers of this article can do is contact their Legislator and let them know what you feel about this situation.

UAGE will help you identify who that is if you require that help.

UAGE will continue to monitor the drafting of legislation and post the information on this site.

UAGE Rejoins CWA

At a time when it is critical for public employees to be well educated on all the changes occurring on a legislative and agency level in Utah, UAGE rejoins its efforts with the Communications Workers of America.

UAGE is affiliating with the Communications Workers of America (CWA) and negotiations began early summer.  When Salt Lake County passed a new Meet and Confer Ordinance introducing a form of collective bargaining into the mix, we decided to get help.

CWA is the second largest public employee union in the nation with between 800,000 and one million members.  The significance for UAGE in choosing CWA goes to the fact CWA is the only democratic union around – not the political type – a true organization operating from the bottom or member up.  All things UAGE is that way too.

UAGE members have always served on boards and committees setting agendas, driving policy and determining legislative priority.  Any time you have the organization doing the work for you, acting from the top down, you not only get lost in the process, you never get a chance to be heard.

The UAGE/CWA partnership will bring to Utah financial as well as educational resources.   Leadership positions will be filled with people well trained and ready to assist you with ways to mitigate problems, talk about change and solve working condition issues,

UAGE law enforcement members will benefit from a CWA division called the National Coalition of Public Safety Officers (NCPSO).   All aspects of public employment are professionally represented.

Come with us – Join UAGE/CWA and benefit from a coalition of public employees in Utah who can now bring about true change.

Meet & Confer Comes to SLCO

Meet & Confer Comes to Salt Lake County

A form of collective bargaining called Meet & Confer was formalized in Salt Lake County on June 23, 2009 through an Employee Relations Ordinance.  Since then county employees have seen a variety of organizations attempting to gain their approval and vote.

The new Ordinance requires that any organization wishing to become the first bargaining agent in one of five units throughout SLCO, must collect signatures of 25% of all eligible employees in that unit. The show of support can be through signing an “authorization for representation” card, a membership card or a measure deemed appropriate by County Human Resources. Once collected, a petition is requested, signatures certified and an election called for by the County Council.

UAGE has received several calls registering complaints about an organization (AFSCME) who was harassing them in parking lots, calling them at home and intimidating them on doorsteps until they signed their authorization cards.. Our advice was to let them conduct themselves in that manner – county employees would reject their style. AFSCME did however manage to collect enough signatures in the Blue Collar Unit to call for an election that should occur around the first of October. Operating Engineers Local 3 is close to obtaining their 25% as well. The ballot will then contain two unions and a selection called “No Representation”. Employees who felt forced into signing with AFSCME should know that UAGE is supporting the campaign of Operating Engineers.

No Representation is a misnomer. That choice will always appear on ballots regardless of which Unit is undergoing an election – it’s just part of this process. But for county employees to actually choose “no representation” is foolish. The Mayor and Council would be glad to represent you, but with no guarantees it will be in the same manner. Besides, the Mayor and Council have other duties and responsibilities. They won’t have the time or desire to address all of your needs so the meeting and conferring piece of the new Meet & Confer Ordinance would be moot.

For clarification, the five bargaining units are 1) Mayor’s Portfolio, White Collar Unit; 2) Mayor’s Portfolio, Blue Collar Unit; 3) Sheriff’s Office, Deputies Unit; 4) Sheriff’s Office, Corrections and Protective Service Officers Unit; and 5) Sheriff’s Office Civilians Unit. UAGE has active campaigns occurring in three of the five Units – White Collar, Corrections and Civilians Units. If you are an employee in any of these three Units and would like to support UAGE, please contact us at info@uage.net

and we will be happy to provide you with any information you require. Or call the office at 801-483-1200.

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