Information for General Employees in Group I
(Combination of Blue and Orange Service)
Effective July 20, 2019, all General Employees (both Groups I and II) will contribute an additional 1.1% toward the pension solution. Because of their larger benefit, employees with Blue Service will also contribute another 0.7% annually for their number of years of Blue Service earned. (For example, an employee with five years of Blue Service will contribute 1.8% for five years, then contribute 1.1% each year going forward.)
COLA (Cost of Living Benefit) changes
The current structure of the COLA has been completely preserved for all active employees in Group I who retire, who retire early with a penalty, or who enter DROP by Jan. 1, 2021. These employees will receive either 1) an ad-hoc COLA, or 2) a simple 2% COLA for their years of Blue Service and Orange Service through July 20, 2019, depending on their previous individual choice.
COLAs have been eliminated for Group I's future service, effective July 20, 2019. This means that employees with Blue Service will no longer receive a COLA for their future service after this date.
Employees with a combination of Blue Service and Orange Service who do not retire or enter DROP by Jan. 1, 2021, will see their COLA for the service earned before July 20, 2019, become a variable COLA, which is based on the health of the fund. Note that current projections indicate that a variable COLA is unlikely to be awarded for the foreseeable future.
Major Medical Leave
As of July 20, 2019, any future major medical leave earned will not convert to service credit upon retirement. However, all unused major medical leave balances earned prior to July 20, 2019, will continue to convert to service credit.
Risk sharing mechanism
If the health of the pension is not restored by changes to the benefit and contribution increases, a risk sharing mechanism will kick in during 2022. If that happens, General Employees in both Group I and Group II will contribute up to an additional 1.6%, with the increase limited to 0.8% per year in any one year. Any further changes would require city council adoption and potentially another council vote.
Overtime contribution and DROP increase
General employees do not currently make contributions to the pension fund for any overtime earned. The city makes contributions to the fund for all overtime earned by General Employees with Blue/Orange Service (Group I), but does not currently make contributions on overtime earned by General Employees with Orange Service only (Group II). As approved by the successful employee vote, general employees will make contributions on all overtime earned, effective July 20, 2019. This includes members with Orange Service only (Group II).
Additionally, the DROP period will increase from five to six years, effective July 20, 2019, contingent upon a successful employee vote.