Removal of retirement provision stating retired employees had to suspend retirement plan when rehired or elected into city employment.
Keith Dalton's motion of striking Provision 5.15, Section A passed 3-2 with himself, Chris Smith, Michael Whatley and Ocie Franklin approving, and Hawnethia Williams and Janet Goodman disenting.
Dalton and Smith feels former wording in plan discriminates against retired employees wanting to run for election.
Motion makes it possible for person to be paid twice by city
Georgia retirment plan and US Social Security has restrictions on retirees regaining employment.
COVINGTON- Elections for the position of Covington mayor and three of the city’s council seats may not be until November, but the first political salvo was fired at Monday night’s council meeting, some five months before the Nov. 3 election day.
Councilmen Keith Dalton and Chris Smith made first and seconds, respectively, for a motion to remove a part of the city’s Defined Benefit Plan that could have a direct effect on the 2015 municipal elections.
Dalton moved to strike Provision 5.15, Section A, making it so a retired city employee would not have his or her retirement benefits suspended if they were to be rehired or elected to come back with the city. Prior to Monday’s vote, which passed Dalton’s motion 3-2, a retired employee could not be paid by the city if rehired or elected while earning retirement benefits.
Dalton, who serves on the city’s pension committee, said the provision was a rule that was enacted in the 1970’s and was called “archaic” by one of the members of the committee.
“If you worked here and started drawing retirement it puts a restriction on you that you couldn’t run for city council and be treated like anybody else would,” Dalton said.
Councilwoman Ocie Franklin then requested a discussion before it was passed, stating “This was something that was sprung on a lot of us who did not know or understand. I want everyone to have an opinion and know what they would think.”
There were many opinions on the controversial matter, including that of Mayor Ronnie Johnston, who referenced his experience of running a company in the private sector and dealing with paying out retirement plans and pensions.
“I do think it is our responsibility as a body before changing something really quickly, that we make sure we address the whole thing,” Johnston said.
He brought up the points that the retired and rehired person in question would be getting paid twice by the city and its taxpayers, could earn two retirement plans from the city and that it could cause a discrimination issue if a person who was previously employed by the city, and therefore qualified for their position, wasn’t hired again with the knowledge that the city would be required to pay them twice.
“I will tell you that if we are going to change it I would encourage everybody to go to a work session or decide how this will apply to every level of the city,” Johnston said.
Dalton and Smith continually interjected that Section A of Provision 5.15 discriminated against retired employees to run for office.
“I think we’re kind of discriminating against employees who put their lives in here and have institutional knowledge,” Smith said. “Who better to serve than someone who worked in the city for 30 or 40 years.”
Covington’s Human Resource Director Ronnie Cowan, however, worried more how the rule change would affect employees and the problems it would cause for the city’s HR department.
“The current decision of the council creates some HR issues we have to address, and we have to figure out what the best alternatives are for that,” he said. “Particularly with newly passed health reimbursement plan for retired workers. We have to deal with how these two benefits will interrelate with each other if any is possible.”
The provision, which states,
“Normal or Early Retirement Benefits will be suspended as of the date a Participant is reemployed by the city or holds an elective office of the Governing Authority except as otherwise provided herein and shall be resumed as of the first day of the month coinciding with or next following the Participant’s subsequent retirement.
In any case where the payment of the Participant’s Accrued Benefit shall have been so suspended, the Accrued Benefit payable on his or her subsequent retirement shall not be increased at the time of his or her subsequent retirement as the Participant will be eligible for Participant will be eligible for participation in the City of Covington Defined Contribution Plan but shall not resume participation in this Plan. The designation of such Participant’s Beneficiary shall not be affected by the provision of this Section 5.15;”
is one that has remained intact despite a revision to the retirement benefits plan in 2002.
“It had made several variations of improving this plan,” Johnston said.
The state of Georgia has a similar provision for its public school employees that was put into place in 2010 as HB916 Act 455 and Act 457. According to the Georgia employees’ retirement plan, rehired retirees age 65 or older shall “cease their retirement benefit and reestablish active membership in the Public School Employees Retirement Plan (PSERS).”
On a national level, Social Security benefits even decline if person under the full retirement age returns to work. According to the United States Social Security Administration, if your monthly Social Security benefit is $700 and you earn $15,720 or less you’ll receive yearly benefits of $8,400. However, if you earn $16,000 that amount decreases to $8,260 and if you earn $20,000 you’ll receive $2,000 less than that.
Councilwoman Janet Goodman said she voted against the change because there was not enough time to really look it over, and the other descending voter Hawnethia Williams said that the timing of the proposal was too close to the election season for her liking.
In the audience Monday night were three former employees who have been tied to possibly running for a city council or the mayor’s seat this year.
“I have no problem saying publicly that I want everyone to run,” Johnston said. “I’m still mentally trying to think of somebody getting two checks form city of Covington tax payers.”