Hiram City Council approves retirement-plan changes lowering retirement ages and capping employee contribution

HIRAM, Ga. — The Hiram City Council on March 4 approved changes to the city's employee retirement plan that lower the normal retirement age, reduce the early-retirement threshold and limit the employee contribution rate, council members said.

City staff presented two options before the council. Staff said the approved option (called “option 2” in the materials) keeps the employer contribution at the budgeted level while reducing the required employee contribution so workers see more take-home pay. "Basically, because there have been conversations and everything with the GMA, the option 1 ... was reducing the retirement age from 65 to 60, early retirement with 10 years of service from 55 to 50," said Kathy, the city's benefits specialist. She summarized the two options and funding examples during the discussion.

The change adopted lowers the plan's normal retirement age from 65 to 60 and lowers the early-retirement threshold by five years, according to staff presentation. The plan document discussed two multiplier scenarios: a 2.5 multiplier if employees continue Social Security participation and a 3.6 multiplier if Social Security deductions were discontinued. Staff told the council that the approved option would reduce the employee contribution from the current 6.2 percent to a lower fixed rate (described in the meeting as roughly 4–4.4 percent), while leaving the employer share at the budgeted level.

Staff provided cost examples based on a Georgia Municipal Association (GMA) benefit summary. The GMA estimate cited during the meeting showed a total additional cost of about $347,000 under the revised benefit assumptions. Kathy said the employee portion at 6.2 percent for fiscal year 2023–24 equaled $154,817.85 and that, under the lower employee rate in option 2, that employee contribution amount would fall to about $99,882.49, per the examples presented.

Council discussion focused on the budget impact over a long horizon and on employee take-home pay. One council member said the lower employee rate would "put money back on an employee's paycheck" in the near term; Kathy confirmed that the roughly $50–$100 per month per average employee described in the staff example came from lowering the employee contribution. Staff also emphasized that any decision to discontinue Social Security participation would be subject to an employee vote.

A motion to adopt option 2 was made, seconded and approved. The meeting audio records the chair calling the vote with "All in favor? Opposed? Okay, motion passes." The motion as recorded did not include a roll-call tally in the public transcript.

The council did not adopt changes to employer contributions at this meeting; staff said future budget processes could revisit employer-side contribution levels once the plan build-up reaches targeted funding levels.