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Town to fund staff pensions

Ingrid Mezo
The Gazette

Emmitsburg town officials voted 3-1 during a town meeting Monday to enter town employees into a state-run pension program starting July 1.

‘‘401-Ks alone just don’t cut it, folks,” Commissioner Bill O’Neil said. ‘‘Yeah, it’s expensive, but all good things worth having are.”

Employees have to have work either 30 years or reach the age of 62 with at least five years of employment before they can receive a pension, according to Sherlynn Matesky, deputy director of legislation for the State Retirement and Pension System of Maryland.

Town clerk Donna Despres said she was pleased with the decision.

‘‘I think it will aid in the retention of long-term employees,” she said.

The town now provides its employees with a 457 retirement plan, which is the government equivalent of a 401K, as well as a percentage of health, dental and life insurance benefits, Despres said.

The state pension program is retroactive, meaning that employees who worked for the town before the program was instituted will be credited for their years and hours of employment with the town from their first day as town employees.

In order to enroll employees in the program, Emmitsburg will have to pay about $318,000, to be spread out over the next 10 years or more, to cover the amount of time some employees have already worked for the town. Town staff have determined annual back-pay costs will come to about $28,000 a year, Despres said.

In addition to the $28,000, the town will pay 6.5 percent of payroll each year to cover the program, Hoover said. Since payroll fluctuates constantly, an exact figure was not available.

The town had originally set aside $42,765 in the draft fiscal 2006 budget to provide seed money for employees to become part of the system this year, but that money was transferred to the Capital Improvement section of the accepted budget when the measure failed to pass in June.

O’Neil was absent from the town meeting in June during which the measure failed to pass. O’Neil asked for the pension benefit to be brought up for another vote on Monday since he was unable to vote on the issue the last time it came up.

‘‘A pension is more than just a system for providing a reliable form of income to loyal employees,” O’Neil said. ‘‘It also provides disability and death benefits.”

O’Neil pointed out that town employees often have to drive to other municipalities and other areas in the state as part of their job description, and that the town owed it to them and their families to provide disability insurance to them.

Commissioners Glenn Blanchard and Art Elder voted along with O’Neil on Monday in favor of the retirement benefit.

‘‘We need to look at the issue of retention as a major factor,” Blanchard said. ‘‘The counties around us are recruiting pretty heavily [for municipal staff], so we live in an area where people can shop around.”

Thurmont, Walkersville, Brunswick and Middletown are among other municipalities in Frederick County which provide state pension plans for employees. The Frederick County Board of Education and the Catoctin and Frederick Soil Conservation District also provide employee pensions, according to the State Retirement and Pension System of Maryland’s comprehensive annual report.

‘‘We have over 109 municipalities in the state that provide this benefit to their employees,” Matesky said.

While Mayor James Hoover spoke in favor of granting employees the benefit, he abstained from voting Monday because he is a vested member of the state’s retirement program, he said. In June Hoover voted for the measure, and Elder voted against it.

This time around, Commission President Chris Staiger was the only member of the board who voted against granting town employees the benefit.

‘‘I’m not opposed to the plan in general, what really irks me is the retroactive retirement benefit,” Staiger said. ‘‘Let’s say we have some senior employees who have worked here for 10 or 15 years. They could move to another municipality, and we’re still left paying that person’s retroactive benefit.”

Several town residents who came to the meeting spoke in favor of granting the town’s employees the retirement benefit.

‘‘I would like to speak strongly in support of this proposal,” Sister Eleanor Casey said. ‘‘I think it is a matter of justice for people who work hard to know a just and fully funded program will be there for them when they retire.”

Residents Larry Little and Don Briggs also spoke in favor of the program as a way of hiring and maintaining qualified staff members.

Former commissioner Dianne Walbrecker said she was not in favor of the program because of the tax increase it would bring.

‘‘I think our employees do an incredible job,” Walbrecker said. ‘‘However, I wonder if anyone’s asking the residents in our town. I think we need to ask taxpayers how much more they can take.”

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