Newly hired city department directors and other non-union managers will have a less lucrative retirement plan under a proposal by Lincoln Mayor Chris Beutler.
The proposal treats top managers the same as other new city employees, who are getting less city money for their retirement fund than current workers.
Changing the retirement match for these 50 positions "sends the right message -- we are in this together and we must all play a role in keeping city hall expenditures as low ... as possible," Beutler said during a Monday morning news conference.
City employees, except for police and firefighters, have a defined contribution pension plan through which employee and employer set aside a specific amount of money that then is invested for retirement, much like a private company's 401(k) plan.
Traditionally, the city generally has matched employee contributions two-to-one.
Last year, three of the four city unions agreed to a less lucrative retirement fund match for new employees during contract negotiations.
So newly hired employees will get a 1.3-to-1 match. Specifically, employees will contribute 7 percent of their base pay to the plan and the city will put in 9 percent.
One union refused to agree, and its contract dispute is before the Nebraska Commission of Industrial Relations.
Beutler is asking the Lincoln City Council to approve a similar change for all new hires to the 20 department directorships and 30 other non-union positions.
For new department directors, the change is even more dramatic. Now, the city pays 12 percent of director salaries into the retirement fund, even if the employee puts in nothing.
Other employees must contribute 6 percent of their salary before the city contributes its 12 percent match.
Beutler has been criticized by talk radio, mayoral candidate Tammy Buffington and City Council candidate Deena Winter for not applying the reduced benefit to current department heads and himself.
The mayor and his aides are taking a 12 percent "gift" for their retirement, said Buffington.
"How many workers in Lincoln get money contributed to their pensions without having to put a cent of their own money into the fund?" she asked.
Winter also criticized the benefit for current department heads.
"This is a more generous benefit than any other city employee gets," she said in a press release.
"After nearly two years of pushing city employee unions to reduce their own retirement benefits, I think Beutler and his people ought to show that they're willing to walk the walk, not just talk the talk," said Winter, who is running for the southwest District 3 council seat.
Beutler said his salary and benefits are set by the City Council in January.
He said he has not had a salary increase in four years, does not use a city car and has never asked for mileage reimbursement.
"I'm trying to do my part," he said.
Beutler said he is seeking to apply the new rules only to newly hired directors out of a sense of fairness, so current directors are treated the same as the people they oversee.
The city attorney's office has said the city cannot negotiate changes in the retirement program for current employees, Beutler said. So he could only look at changing the plan for new employees during contract negotiations.
Eventually, more than 800 of 1,200 city jobs, outside of fire and police, will be covered by the new retirement contribution system, producing long-term significant savings, he said.
The new city plan -- 7 percent of salary by workers, 9 percent by employer -- is still more generous than state and county defined contribution plans.
State employees contribute 4.8 percent of their salary and the state provides a 7.488 percent match.
Under the Lancaster County plan, workers pay 5.2 percent of their salary and the county provides a 7.8 percent of salary match.
Reach Nancy Hicks at 402-473-7250 or firstname.lastname@example.org.