Council considers change in retirement benefits for employees

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ROBERTDALE, Alabama — The Robertsdale City Council is considering a change in its benefits which will allow all its employees to retire with 25 years of service, or at age 60 with 10 or more years of service.

Currently, only employees hired prior to 2013 under the state benefits package with Retirement Systems of Alabama are considered Tier 1 employees.

All employees hired after Jan. 1, 2013 are considered Tier II, which means that they are only eligible to retire at age 62.

The city is currently looking into the possibility and cost of switching all its employees to Tier 1 benefits.

“All of these employees would still be considered Tier II employees,” said CFO Ann Simpson. “Under the new plan, they would just be eligible for Tier I benefits.”

Currently 60 of the city’s 93 employees are considered Tier I. Of those 60 employees, 54 will be eligible for retirement over the next 10 years. Anyone hired to replace those employees would be considered to be Tier II employees.

Employees who are considered Tier I employees are required to contribute 5 percent of their income to the RSA program, Simpson said. Under the regulations, police department and corrections employees considered Tier I employees are required to contributed 6 percent of their income. If the city had a paid fire department, those employees would also be required to contribute 6 percent, but since Robertsdale does not have a pair fire department, that does not apply.

Tier II employees are required to contribute 6 percent of their income to the program, 7 percent for police department and corrections employees.

In order to receive Tier I benefits, Tier II employees would be required to increase their contribution to 7.5 percent, or 8.5 percent for police and corrections employees.

The city would also be required to pay a fee of $85,596 called an Unfunded Actuarial Accrued Liability, which would be amortized over 15 years in monthly payments. Year one estimated amortization would be $8,165 with a normal cost change of $10,204 for a total impact of $18,369 or $1,530.75 per month.

The rate changes on a yearly basis, based on the amount of benefits paid by the system, officials said.

“This is an ‘all or nothing’ thing,” Simpson said. “If we agree to do this, then all of our employees would have to pay into the system. They cannot choose whether or not they want to participate.”

The city council voted at its Tuesday, Jan. 21 meeting to pursue whether or not employees would like to participate in the new benefit plan.

In other business Jan. 21, the council approved the rezoning of the Grove Parc Planned Unit Development located at the intersection of County Road 48 and County Road 71.

The subdivision was approved by the city council on May 18, 2018 and Phases 1 and 2 of the project have been completed.

The subdivision had to come back to the council for approval, however, after new developers decided to revise the layout, reducing the remaining lots from 99 to 90, increasing the amount of open space and proposed the construction of a lake to be used both as an amenity and for additional stormwater detention.

The council voted unanimously Jan. 21 to suspend the rules for immediate passage, then approved the ordinance unanimously by roll-call vote.

Also on Jan. 21, the council:

•Approved a contract with Goodwin, Mills & Cawood to pursue USDA grant/loan funds for sewer system improvements.

•Granted route approval to St. Patrick’s Church and School for the annual Leprechaun Chase on Sunday, March 16 and approved advertising for the event on the city’s digital billboards.

•Approved a request from Rosinton School for sponsorship renewal for the annual Armadillo Dash 5K to be held Saturday, March 7. Cost for renewal is $150.

•Agreed to move forward with demolition of a structure located on Brewton Street.

•Approved a purchase request for an F-150 for the Public Works department.

•Awarded a bid in the amount of $180,000 for the city’s new fire truck.

•Approved the purchase of equipment for the Public Works department.