At a time when many American workers are headed toward retirement insecurity because of a right-wing attack on traditional pensions, the city of Little Rock, Ark., is trying to do right by its public service workers.
Late last month, the Little Rock Board of Directors voted unanimously for a resolution to begin developing a new retirement plan that’s intended to provide its retirees with a livable income. We applaud them for their decision, which affects approximately 900 current employees represented by AFSCME Local 994 (Council 38).
As explained by a consultant who developed the proposal, the current “defined contribution” system for non-uniformed employees may not leave workers who retire after 20 years with enough savings – plus their Social Security income – to retire comfortably.
Under the proposed system – which would go into effect next January for current and future employees – workers will make a contribution to their retirement fund of 4.5 percent of their pay, up from the current 3.5 percent. The city would contribute 9 percent, up from 7 percent.
The goal is to ensure that those who retire with full benefits receive at least 80 percent of pay, including Social Security. As the city’s consultant explained at a board meeting earlier this month, this plan would help ensure that retirees have a livable income in retirement.
In addition, such a retirement incentive would serve as an effective tool for recruitment and retention of employees.
It’s noteworthy that the consultant said this will actually be cheaper for the city than requiring employees join the state’s retirement system.
The Little Rock Board of Directors has taken a positive step toward preserving the promise of a decent retirement to employees who have devoted decades of hard work to provide important services to their community. AFSCME members will keep fighting the corporate-driven campaign to undermine retirement security by eliminating pensions. Pensions are the best way to ensure retirement security.