City employees talk about effects of new pension changes - KSFY News - Sioux Falls, SD News, Weather, Sports

City employees talk about effects of new pension changes

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The Sioux Falls City Council approved pension plan recommendations intended to get the city out of the retirement business.

First, new hires would be promised the benefits from the South Dakota Retirement System.

Beginning in 2014, current city employees would see contributions increase by 2% each month for two years.

Those employees would also be given a stipend system to pay for health care once they retire.

Benefits for retired city employees will not change.

After a long discussion about the future of retirement, the Mayor is happy with the outcome.

"I was certainly pleased that the council implemented one of the recommendations that I had which was taking new employees and having them work with the South Dakota Retirement system," Mayor Mike Huether said.

A system the mayor calls rock solid.

One major group of employees affected: Sioux Falls Firefighters.

Captain Michael Gramlick, president of Local 814, says some of that decision is a big concern, especially when it comes to health insurance.

Current city employees will receive a stipend for theirs, future employees on the state's system will not.

"My guys starting a year from now, two years from now, that doesn't seem like a big deal to a 21 year-old. 30 years from now, in their 50s without health insurance, it's concerning to me," Capt. Michael Gramlick said.

Another factor is a 2% monthly increase in contributions starting in 2014.

"It is a big deal. While it's a 2% increase, there's no way to slice that's a cut. That comes out of your wages. That 2% is a big deal, it'll be a topic talked about a lot longer than today," Gramlick said.

Mayor Huether said this was an issue that needed to be addressed because the city's system is just not sustainable.

"The numbers are growing at a pace that we will not be able to keep up with. If we would, we'd have to give up other really high priorities for our town and we can't allow that to happen and the people of Sioux Falls wouldn't allow us to make that happen," Mayor Mike Huether said.

The mayor also added he doesn't foresee these changes impacting any of the city's future hires. Next steps include working with the state for future hires as well as educating existing employees to get them motivated about changes.

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