Dresden Board Authorizes Retirement Plan Study
BY DAVID FISHER
DRESDEN (December 6) — During the Monday night’s meeting of the Dresden City Board, members approved an actuarial study to determine the potential benefits city employees could receive by switching from the city’s retirement plan to the Tennessee Consolidated Retirement System plan, which could also possibly create a cost savings for the city.
City Employee Retirement Plan
Mayor Jeff Washburn stated that he, along with Director of Finance Carla Edwards, and City Recorder Jennifer Branscum, met with a representative of the Tennessee Consolidated Retirement System in November, to discuss the possibility of converting the City of Dresden’s current retirement plan to the TCRS plan. The mayor said, after much discussion, he feels the state retirement program may be beneficial to all city employees, with benefits comparable to what is available to them now through the self-funded plan.
The mayor asked the board for permission to have the state complete an actuarial study, at a cost of approximately $1,500 to $2,000, to determine whether it would be beneficial to move to the new Tennessee Consolidated Retirement Service plan and have the same or better benefits, or keep the current City retirement plan. He stated the study will show which retirement plan is more cost effective for the city and best for the employees.
According to Mayor Washburn, the interest drawn on the money city is holding in reserve for employee’s retirement payments under the city’s current plan is less than 1.0 percent, while the state plan is presently earning 15.62 percent.
Some of the highpoints outlined in the TCRS plan are as follows:
All employees of the City of Dresden could be transferred over to TCRS without any loss of vesting of years of service credit.
All funds credited to an employee under the city’s current retirement plan can be transferred to the TCRS plan.
TCRS has multiple plans and options that can be considered for adoption, should the city be interested in converting to the state retirement program.
The percentage of payroll costs is listed under the different plans. Each plan has a cost-of-living adjustment option. There is also an option for employees to contribute a percentage of the cost of the pension plan.
The cost to the city for the pension plan it is currently under is presently 15.62 percent, and it does not have a cost of living provision. The city’s plan is estimated to cost $85,956 during the current fiscal year, which amounts to roughly 20 cents on the city’s current property tax rate.
In addition to the retirement plan selected by the city, employees would have the option of participating in a separate 401(k) plan at no cost to the city.
During discussion, it was noted that the TCRS would be a great benefit to police officers. It would allow them to transfer to other city departments without losing their retirement benefits.
Mayor Washburn stated the TCRS representative recommended the city have an actuarial study performed by the state to get an accurate comparison of costs for the board to consider. The TCRS representative also suggested the start of the next fiscal year on July 1, 2022, would be a good time to change over to the state retirement plan, if that was the board’s decision.
After learning of the potential benefits of converting to the TCRS plan for the employees and cost savings to the city, the board voted 4-0 to authorize the actuarial study. Those voting in favor of a motion to approve the study were alderpersons – Sandra Klutts, Ralph Cobb, Lyndal Dilday, and Willie Parker. Aldermen Gwin Anderson and Kenneth Moore were absent.
The board also agreed to have a TCRS representative to address the board, explain the differences between the city and state retirement plans, and answer questions, once the study is completed.
Police Officer Recruitment Proposal
The board unanimously approved a police officer recruitment program, designed to attract and keep officers on the Dresden Police Force. (See “Dresden Board Approves Police Recruitment.”
With no further business to discuss, the meeting adjourned.