Reducing Retirement Benefits Could Increase Employee Pay: County Mayor
The mayor of Greene County, Tennessee recently explained that the county’s move to reduce the contribution towards retirement benefits would benefit the employees in the future. He explained that though the county contribution towards retirement benefits would decrease by 2 percent, it will not be at the minimum level. He also said that the money saved from lesser contribution would be used to increase the salaries of the employees.
Clearing the Air on Retirement Benefits Reduction
David Crum who currently holds the position of Greene County Mayor cleared the air on the county’s proposed move to trim down its Tennessee Consolidated Retirement System (TCRS) contribution. TCRS is a defined benefit pension plan that’s trusted by a lot of people. He stated that the proposed move does not aim to cut the employee retirement of the county members. The move is expected to be implemented from the next fiscal year.
Increasing the Salaries
The proposal to cut back on the TCRS came after the mandate that stated elected officials across the state should be given a 2.03 percent pay increase in the upcoming 2016-2017 fiscal year. Crum was then seen saying that if his salary is increased, he would want the county people to get an increased salary too.
Reducing the Retirement Benefits
In order to ensure that the pay of every member of the county is increased, Crum proposed that the TCRS contribution must be reduced a bit. The TCRS contribution was 10.43 percent during the fiscal year of 2015-2016. The contribution is revised annually by the state and it recently stated that the minimum contribution of the county towards TCRS for the fiscal year 2016- 2017 should be 6 percent.
Crum has suggested that the contribution should be 8.4 percent rather than 6 percent or the current 10.43 percent. The money saved from reducing the TCRS contribution can be utilized for increasing the pay scale of the county employees. This strategy would help the state to have enough money for the future expenses as well and it would help the state to avoid a shortage of money.
Who will be impacted?
If the proposal to reduce retirement benefits offered by Crum is implemented, all the people who are covered by the TCRS would be impacted. As per the Tennessee Department of Treasury, TCRS covers all the state employees, K-12 public school teachers, employees of political subdivisions who have opted for the plan and higher education employees.
