SUMITON - The Sumiton City Council voted Tuesday to improve the retirement benefits for 23 of its employees, moving up to a Tier 1 system with the Retirement System of Alabama (RSA).
City Clerk Nina Absher said Tuesday afternoon the change will result in paying an extra $800 per pay period. The move will affect about half the work force in the city government, as 22 employees were already on Tier 1.
A 2019 act gives local employers that participate in the Employees Retirement System until Saturday to adopt a resolution if they desire to provide Tier I retirement to those on the Tier 2 system.
During the council meeting, Fire Chief David Waid said in the early 2000s, as the Great Recession started, RSA general moved new hires into a Tier 2 program. Under that plan, a worker spends a longer time with a city and has to wait until 62 to retire. Now, the state is allowing municipalities to put their Tier 2 employees under the better, if more expensive, Tier 1 benefits.
"We have a lot of cities around us who have already gone to providing Tier 1 employees for their Tier 2 service," Waid said, pointing out other municipalities could outperform Sumiton in recruiting good workers due to pay and benefits. "So we already know we have some issues on hiring, particularly in the police department."
Later that morning, Jasper City Council approved doing that, and Cordova and Oakman officials agreed to switch to Tier 1. Carbon Hill City Council turned down the change.
On Tuesday, Parrish Mayor Bubba Cagle said his city has not made a change, while Dora Mayor Randy Stephens said that day there was no plan to change in his city.
"I think it would be good for our employees," Waid told the Sumiton council, noting it would affect three full-time Sumiton firemen. "One of them already has Tier 1 benefits," he said.
"You are looking roughly at the cost of adding one employee to the payroll," Mayor Petey Ellis said, adding retention of workers is a factor to consider.
Absher said it still takes 10 years to be vested with either Tier 1 or Tier 2, with the last 10 years being what the monthly pay is based on. "With Tier 1, it is based on your highest three years. With Tier 2, it is your highest five. That can make a significant difference," she said.
She gave an example of working 25 years and averaging $30,000 annually in salary. "Tier 1's monthly benefit would be $1,257 a month, where Tier 2 would be $1,031," she said. "You are looking at a difference. If you are basing it off of your best five or your best three, it is even going to change it more than that."
"Our employees are the best asset we have. I make a motion we do it," Councilman Floyd Burton said, before the council voted first to suspend the rules and then to adopt the resolution to change to Tier 1 benefits.
Waid, who said he is not a full-time employee as fire chief, said he appreciated the council's action for the employees. "That's a pretty big expenditure, and thank you," he said.