LR Changes Retirement Plans for Non-Uniform Workers

LITTLE ROCK, AR -- The retirement plan for 900 Little Rock city workers will see dramatic changes thanks to a vote Tuesday by the city's board of directors.
LITTLE ROCK, AR -- The retirement plan for Little Rock city workers will see dramatic changes thanks to a vote Tuesday by the city's board of directors.

Instead of giving workers a lump sum check when they retire, city employees will now get smaller checks every month.

"I live paycheck to paycheck," said Nita Moser, who has worked for the city's fleet services department for 13 years.  "Every dime I get goes towards bills."

Mosey is one of about 900 non-uniform city employees that will be affected by the change.

"[They are] people who dig ditches and fill pot holes and pick up trash," she explained.

Under the previous retirement plan, money was taken of their paychecks and put into a pot where it was invested.
When they retired, employees got a lump sum payment.

"You're going to end up without any money," Mosey said.

She says some of her coworkers -- especially those on the lower end of the pay scale -- lost large chunks of their pots when the stock market crashed or ended up blowing the cash too quickly.

"He retired and had to come back and work part-time because he went out and bought a double-wide trailer," she said, recalling one city worker's plight.

At the city council meeting Tuesday, the board of directors voted to make changes to the retirement plans.

"What they have done here is given security to the employees where they will know what they will receive in retirement," said Jim Nickels with Local 994.

Instead of a lump sum, non-uniform city workers will now get monthly checks based on a formula that takes into account how much they got paid and how many years they worked.

Mosey says it will give city workers retirement security they desperately need.

"It will help them because they are breaking their backs out there," she said.  "They really are."

The move to a defined benefit pension bucks the trend of municipalities moving away from those type of plans.
But the change won support of even the more conservative members of the board of directors when safeguards were put in place that aim to ensure the new pension plan doesn't end up swallowing too much of the city's budget.

The city's actuary says the new plans will be worth about 40 percent more, on average, compare to the previous system.

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