STATESBORO, Ga. (AP) - A south Georgia city is sweetening its retirement plan, but new city employees will have to contribute toward benefits for the first time.
The Statesboro Herald reports the city’s 300-plus employees will be able to retire beginning Jan. 1 with full benefits after 30 years of service, regardless of age.
Previously, police officers and firefighters could retire with full benefits after 25 years, but could not collect retirement until they were at least 55 years old.
Statesboro’s other employees had to reach age 65 and have 30 years of service to collect full benefits. Those retiring younger than 65 or with less than 30 years drew reduced benefits.
The City Council has also changed the rules to allow employees to collect pensions equal to more than half an employee’s final salary, up from a limit of about one-third right now.
The city will now also allow sick leave without limit, removing the current maximum of one year of unused sick leave. Employees can’t directly cash in sick leave when departing, but can credit it toward years of service for retirement.
Statesboro’s plan is part of the Georgia Municipal Employees Benefit System, maintained by the Georgia Municipal Association. However, the city chooses the terms of its participation.
City Manager Charles Penny said the city will continue to entirely fund retirement for current employees. However, new employees hired after Jan. 1 will be required to contribute 3% of their pay.
The city will have to put aside 8.05% of payroll, up from the current 6%, to pay for the more generous benefits.
The city hasn’t proposed any tax increases to cover the $300,000 in increased yearly costs, instead turning to surplus tax and utility revenues.
Penny said employee contributions will cut city liabilities in the future. He said an upgraded retirement plan will help the city attract workers for hard-to-fill jobs.
“We’ve run into a situation … where we try to recruit somebody from another city and they look at our retirement plan, they look at the one they have, and they’re like, ‘No, we’re not coming,” Penny said.
The system also offers portability. For example, someone who has 25 years’ experience working for other cities could come to work for Statesboro and retire after five more years, Penny said.
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