Easton Affirms Employee Pension Agreement

By Christina Georgiou

Easton's pension agreement for city workers was updated Monday evening to keep current with federal IRS regulations and allow workers to invest more of their paychecks towards retirement.

City admnistrator Glenn Steckman said the city's pension agreement hadn't been officially updated since 1993, but the document is essentially the same from a financial standpoint.

"The IRS requires language updates for pension law compliance," he told council members. "That is the primary change. It is just legal language."

Steckman added, "It's memorializing what's been a practice here--that part-time employee's aren't eligible."
Active members of the pension plan are still grandfathered in and the vote doesn't change those benefits, he noted.

The pension plan as approved stipulates that regular full-time city employees contribute a minimum of 6 percent of their paychecks into their future pensions, but may contribute up to 16 percent if they wish. The former limit was 10 percent.

City Finance Director Chris Heagele said the limit increase was in reponse to requests from some city employees.

"It's the same as a private employer's 401K," Heagele said. "You get a guaranteed return of 6 percent. Unless you can find an investment that guarantees more than 6 percent, it's an excellent place to put it."

If the fund generates more than 6 percent, the difference is split between the city and the employee, he said.

Heagele noted the PMRS fund is separate from the defined benefits pension city employees receive upon retirement.

"Defined benefit is provided by the city without contribution from the employee," Hegele said.

Any money the city receives from an overage will go toward paying for employees' defined benefits, he added.

The employees' pension plan is backed by the State of Pennsylvania, and does not include police or firefighters, city officials said.

The cost of police and firefighters' pensions is backed by the city directly, and keeping up with costs recently was behind the controversial decision to approve a "commuter tax" to help pay sharply escalating costs.

"This isn't the pension plan that's been killing us," Councilman Mike Fleck said.
Mayor Sal Panto concurred.

"I wish everyone were still in the PMRS fund, instead of the city-funded pensions," Panto said. "(Those cost) about $100,000 per resident, and it's killing us."

The new document outlining the PMRS pension plan passed 6-0. Councilwoman El Warner was absent.