The recommendation voted on by city councilors this week would put all newly hired city employee retirement benefits in the hands of the South Dakota Retirement System. It also eliminates health benefits for those retired individuals.
Representatives of city employee unions are not arguing against that part of the plan, but they must vote to approve the proposed changes to the current city employee benefits.
“The employees of the city of Sioux Falls benefit from a great pension plan. And it is an excellent benefit. A defined benefit plan is something not everyone today has an opportunity to enjoy,” Pension Board member Angeline Lavin told city councilors this week.
The recommendations would increase current employee contributions by two percent over two years. They would also eliminate retirement healthcare benefits, opting instead for payments based on the employees' years of service until retirement age. But a police union representative said that may be a tough sell.
“It's all take and no give. There's really no incentive I can see for the membership to vote for it,” president of the Fraternal Order of Police Labor Council David Dunteman said.
According to Dunteman, the proposed increases in pension contributions would be a wash to the city's police officers, whose new contracts call for a two percent raise.
“Basically three years no raises for a city, who says they're extremely-well funded,” Dunteman said.
Regardless of what employees decide, the current city plan will be in business for years as city workers slowly retire.
City officials are now planning sessions talking current employees through the proposed changes. They say it will take a few months to work out the details and call for a vote.