Chico PD Employees to Pay More into Own Pensions

Pending city council's approval of an amendment to the CalPERS agreement, non-sworn police department employees will get a 2% raise, while paying part of the city's share of their retirement funds.

Posted: Apr 17, 2018 3:51 AM
Updated: Apr 17, 2018 10:04 AM

Chico, Calif.-- Despite the good news that this year the city of Chico is no longer in the red when it comes to debt, the rising cost of pensions for city employees is a looming financial concern.

About 40 non-sworn police department employees are among those who may soon be putting 3% more of their paychecks into their retirement accounts, taking that burden off of the city.

That brings their contribution to a total of 6%; but a union representative for the Chico Public Safety Association says they've agreed to the plan, and employees will in turn take a 2.09% pay increase.

The council tonight will consider approving the city's plan change their own contract with CalPERS to allow this union and the directors to take over that financial responsibility.

This isn't a cure-all for the rising cost of pensions in the city of Chico and really, impacting cities across the state - the city already puts 17% of it's general fund toward employee retirements, and that number is set to go up by fiscal year 2020-2021.

"We've been planning since the first day I got here how to best mitigate and unsustainable pension system that continues to grow," said city Manager Mark Orme. "As we look out and forecast we're seeing the pension growth, and it's going to happen in every community."

Pension payments make up about 11% of the general fund for most California cities and the League of California Cities recently reported that they expect pension costs to jump by at least 50% by 2024.

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