City weighs exiting CWA pension plan; staff outline three replacement options and 20‑year withdrawal liability

City Manager Brian told the budget workshop that the city has received an actuarial report showing higher-than-budgeted contribution rates for the general-employee retirement plan the city belongs to with the Communications Workers of America (CWA). Brian said the actuarial findings show a required contribution closer to the 16 percent range per employee — well above the 9 percent the city historically budgets. "The percentages are a little high right now. It's higher than what we have budgeted. It's closer to the 16% range per employee and that's with contributions from the employees," he said.

At the meeting staff laid out three broad options if the city proceeds to withdraw from the CWA plan after recent union decertification activity: continue contributing to CWA (and face increasing liability), move hourly employees into MissionSquare-style accounts (a defined-contribution model), or adopt a city defined-pension plan similar to the police pension. Brian described differences the city would face under a defined pension, including a likely increase in the city contribution to around 16 percent on average and vesting rules ("more likely going to be 5 years"), and warned of a multi‑year withdrawal liability the city must pay to exit CWA.

Brian told council the budget includes a planned line item for a 20‑year withdrawal liability payment: "$297,000 That is the withdrawal liability that is due for 20 years." He said the liability and transition timing are sensitive to whether the union is legally certified and whether the city is considered to have an existing contract in force through Sept. 30; the city has discussed the matter with CWA counsel and with the Florida League of Cities’ retirement arm about implementation options and timing (staff said a new program’s administrative setup could be effective Oct. 1 but might take 60 to 90 days for full operation).

Councilors asked about protections for employees close to retirement. Brian and others said options could be tailored (for example, limited buy‑backs or temporary continuation of MissionSquare contributions for employees within a few years of retirement), but that those protections will be costly. "I've seen those numbers and we definitely can't afford it," Brian said of buy‑backs. Staff also said that if the city delays action, its withdrawal liability could rise as other employers exit the CWA plan.

Why it matters: withdrawing from a failing pension plan triggers a legally required withdrawal liability and forces decisions about what retirement model will cover future employees. The city has budgeted both a 9 percent ongoing contribution and the $297,000 annual withdrawal liability in the proposed FY26 budget; council must weigh fiscal capacity, employee retention, and legal timing ahead of an Oct. 1 effective cutoff discussed in the meeting.