Montgomery Employees Restructuring Retirement Plan Proposal | News
MONTGOMERY, AL (WSFA)- Montgomery Mayor Todd Strange says this restructuring will not affect current employees, only new employees starting October 1 of this year.
Mayor Strange says we're talking about a long term plan to ensure the rate stays at or near 12 percent of payroll in a retirement fund. Mayor Strange says at the rate it was currently going it would be as high as 30 percent contribution by the 2030.
The mayor says the retirement board came to him a few years ago with concerns of maintaining the integrity of the fund and concluded it had to be modified for future employees.
"The new plan essentially has a time frame between when you retire and when you can collect your retirement and/or receive benefits. Today you can retire at 20 or 25 years and immediately receive benefits, that's the unsustainable part because in the industry today and in many governments, you have a waiting period until you're 52 or 55 or 62. With the new plan, if you have 20 years, you will have to wait some period of time before you would be able to collect your retirement," Strange said.
The mayor says one good thing in the plan is new employees who retire will be able to get their retirement in a lump sum payment. That's an option not available to current employees.
The bill now goes to the state legislature. The mayor expects it to be introduced by next week.
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