Bucks County Herald

Pensions sticking point in Perkasie public works contracts

MELINDA RIZZO

How pension contributions will be made for incoming public works and public utilities department workers is the sticking point in inking a new contract with Perkasie Borough.

While employees have been working from a contract that expired in December, borough officials said there was no threat of a strike or work stoppage.

“We have offered a 401(k) contributions-type program, rather than [defined benefit] pension plan to new employees,” said Borough Council President Jim Ryder. Retirement plan changes would only impact new hires, Ryder said.

Perkasie is calling for new AFSCME employees to be enrolled in 401(k) retirement plans, where at least a portion of the funding is shouldered by the employee.

Council did not release the type of 401(k) plan offered to union negotiators for new employees.

Public works and utilities employees are members of the American Federation of State, County and Municipal Employees Union, known as AFSCME.

During a regular business meeting Monday night, Matt Aigeldinger, chairman of the borough’s personnel and policy committee, said the union had come back with a “hybrid” benefit plan, which included pension and 401(k). Council did not discuss or take action on the union’s offer Monday night.

Most private-sector employers have done away with defined benefit pension plans because they are too costly to support.

Bethlehem Steel, a high-profile employer in the Lehigh Valley, shut down its pension plan in 2002, and eventually went bankrupt, in part because it was unable to meet its legacy pension obligations.

In recent years, public sector employers, from local governments to public school districts, have made efforts to shift retirement funding to 401(k) plans.

If the borough and union are unable to come to terms, the next step would be mediation, Borough Solicitor Jeffrey Garton said.

In other news: Unpredictably higher costs for electricity won’t hit borough customers in the wallet this year.

Borough Councilman Jim Ryder said electric rates are set for a 12 -month period, beginning in January, so any cost overruns would need to be picked up by the borough during the course of the year. “We set our electric rates on an annual basis, and we don’t change them during that time,” Ryder said.

Numbers released for higher than anticipated “carrier” or distribution costs are $115,000 over the amount in this year’s budget.

The additional costs were due to higher electric distribution or “ancillary costs” for transmission fees.

“We could make that up [between] now and the end of the year, if the transmission fees come down,” Ryder said.




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