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Hiram council discusses proposed retirement plan change, debate over "skin in the game" clause
Summary
Council and staff discussed proposed changes to the city—s employee retirement plan, options for referendum language, a possible two-year eligibility delay and funding status; no final vote recorded in the work session.
City staff briefed council members on proposed changes to the municipal retirement plan and the mechanics for a referendum, and council members debated whether to include a minimum-service delay before employees could retire under a new multiplier.
Staff said the city and its consultant (GMA) have discussed options and that the council could be asked to vote the following week on referendum wording and an effective date. The packet and recorded conversations with GMA were distributed to council members, staff said.
The substantive policy choice discussed was whether to include a delay (a proposed two-year period) before an employee who enters the new retirement plan could retire under the higher multiplier. One council member said other jurisdictions require two years in the new system to ensure employees have contributed to the plan.
Staff noted technical details raised in the GMA conversations: if an effective date is set (for example July 1), an employee who retires two months later would receive service-credit calculation partly at the prior multiplier and the short post-effective period multiplied at the new rate; a transition option (an "a plus b" approach) is also available if the council chooses to set a limit. Staff reported the retirement fund is currently funded and stated a balance of $1,600,000 in the pension account from prior contributions.
Speakers emphasized that the multiplier effect (examples included a 3.6 multiplier versus the existing 1.5) produces substantially larger monthly benefits only when combined with significant years of service and higher salary years; staff said the multiplier alone does not immediately create large payouts for employees with relatively low years of service.
Council members also raised recruitment and retention arguments: staff said enhanced retirement benefits could help recruit and retain employees, while some members argued the city should consider medical-insurance timing and disability retirements in policy design.
No formal ordinance or referendum wording was adopted during the work session. Staff said they will contact the attorney handling the referendum to ensure correct ballot wording if the council decides to schedule a vote.
