Stock market helps retirement funds for city workers
An extra $910,000 in unexpected savings in the city’s budget is a topic of negotiations for the approximate 200 city employees whose contracts are up for renewal.
According to Linda Swain, the city of South Lake Tahoe’s human resources manager, the city planned to spend the $910,000 over the next year in contributions to the Public Employees’ Retirement System, or PERS.
PERS is a retirement fund used by employees of many local governments in small cities, counties, state college systems and school districts.
Swain said part of the reason PERS extended the savings to the city was because it had done well with employee and employer contributions in the stock market.
Reviewing their actuarials, PERS concluded that the contribution from the city of South Lake Tahoe could be reduced this year by about $910,000 – a savings that was not expected in the city’s 1999-2000 budget.
“That’s a big chunk of change,” she said. “Now the city has to decide what to do with it.”
About $350,000 will be used to pay for an increase in city employees’ health and dental insurance premiums and about $240,000 will be added as savings realized in the first half of 1999.
Use of the estimated $700,000 remaining will be discussed in labor negotiations by all seven of the city’s employee groups.
Jim Jorgensen, labor negotiator for police officers in the city of South Lake Tahoe, said a PERS workshop offered by the city last week was a start in addressing the issue.
“(Negotiations) were very slow and monotonous until the City Council got involved and started talking about the PERS issue and the rebates – that was all very informative,” he said. “The police officers are way behind in compensation and the ability to finance (an increase) is there – just with the savings in PERS money alone.”
But Swain said the savings can’t be reliably budgeted for in upcoming years.
“PERS refigures this yearly,” she said. “We have no idea how long it will last.”
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