WHEN NEW CITY or county employees are hired they are given a choice between pers Plan 2 or Plan 3, which is riskier than Plan 2. If they do not make a choice within 90 days they are put in Plan 3.
The reason Plan 3 is riskier is that half of the fund is based on market returns. Should the market gain, they would benefit, but they would lose out should the market crash again as it did in 2008.
Council 2 believes that an employee should be free to take the risk and choose pers 3, but should not be automatically placed in it.
Not only are employees placed in the plan at the outset of their employment, but they also will remain in the plan for the duration of their employment
.
“Why would you put a person who does not make a choice into the more risky plan?” asks Council 2 Deputy Director Pat Thompson.
“Our argument is simple, only employees who affirmatively choose Plan 3 should be put in Plan 3.”
Measures aimed at doing this were introduced last year, but failed to pass. They have been introduced again this year.
The good news this year is that those bills would save more than $50 million for the pers system over a 25- year period, giving them a stronger chance of being approved.
