Soaring pension costs have state and local governments across the country re-evaluating the retirement benefits they offer employees. Below The Washington Examiner takes a look at the benefits offered in two area jurisdictions.
In Fairfax County, all employees have traditional, defined-benefits plans.
Police:
• Employees contribute 10 percent of their salary. The county contributes 31.3 percent.
• When they retire they get 2.8 percent of their average salary multiplied by the number of years they worked, increased by 3 percent. For example, an employee making an average $50,000 a year who retired at age 55 after working 30 years would receive $43,260 a year.
Most employees in the Fire and Rescue Department and Sheriff’s Department, animal wardens, helicopter pilots and park police officers:
• Employees contribute 7.08 percent. The county contributes 33.81 percent.
• When they retire they get 2.5 percent of their average salary multiplied by the number of years they worked, increased by 3 percent.
General employees
• Employees contribute between 4 and 5.33 percent. The county contributes 17.2 percent.
• When they retire, they get between 1.8 and 2 percent of their average salary multiplied by the number of years they worked.
Teachers
• The county school system contributes 6.33 percent to the state-managed plan and 4.34 percent to a supplementary plan. The school system also pays the employee contribution of 5 percent to the state. Teachers contribute 4 percent to the supplementary plan.
• At retirement, teachers receive 1.7 percent of their average salary multiplied by the total years worked. From the county school system they receive a supplementary benefit of 0.8 percent of their average salary multiplied by their time worked. For example, an employee making an average $50,000 a year who worked for 30 years would receive $25,500 from the state and $12,000 from the school system.
In Montgomery County, public safety employees and employees who have worked for the county since before 1994 have a defined benefits plan. Teachers are on the state’s retirement plan. Everyone else is on defined-contributions plans — or 401(k) plans.
Public safety and long-term employees:
• The majority of employees contribute 5.75 percent of their salary, which will increase to 6.75 percent after June 30. The county contributes an amount determined each year by an actuary.
• At retirement, they receive between 1.65 and 2.4 percent of their average salary multiplied by the years worked up to 36 years.
General employees:
• Employees contribute 4 percent and the county contributes 8 percent.
• Some employees choose where to invest the funds. Others pool their funds with the county’s and are guaranteed a rate of return of 7.25 percent. When they retire, employees are given all the money.
Teachers
• Employees contribute 7 percent. The state’s contribution rate varies annually, though this year’s is 15.45 percent and last year’s was 14.34 percent.
• At retirement, they receive 1.8 percent of their average salary multiplied by their years of service. For example, an employee who worked for 30 years and earned an average $50,000 a year would earn $27,000 a year.
• Employees also contribute 0.5 percent to the county for its supplementary pension plan, and the county school system contributes an amount set annually by its actuary. When they retire, they receive a percentage of their average salary multiplied by their years of service. The percentage varies based on the date the employee was hired. – Rachel Baye
