Columbia council unanimously supports new pension plan for city employees

Monday, July 16, 2012 | 10:51 p.m. CDT; updated 11:38 p.m. CDT, Monday, July 16, 2012

COLUMBIA — A report on a proposed comprehensive pension plan for city employees was approved with much praise at the City Council meeting Monday evening.

On Thursday, Mayor Bob McDavid announced a new pension plan as a solution to the $117.8 million unfunded pension liability. This new plan will save the city $50 million over a period of 20 years. 

City Manager Mike Matthes presented the report of the new pension plan to the council, and it was approved by a unanimous vote. Council members commended Matthes and Financial Director John Blattel in reaching this solution.

Matthes said he was proud that both management and employees were able to work together to reach a solution to the city's pension problem.

After a public hearing and final approval by the council, the plan will be implemented for new hires after Oct. 1.

This plan will have three separate pension plans: utility and general city employees on the Local Government Employees Retirement System (LAGERS), firefighters and police.

According to the report of the new pension plan:

Employees on LAGERS (general city and utility)

  • Full retirement eligibility: Can retire at age 60 but can no longer retire when the employee's age and years of service total 80 or more
  • New contribution rate: Noncontributory 


  • Full retirement eligibility: Can retire at age 55 with five years of service, or at any age if the employee's age and years of service combined equals 80 or more
  • New contribution rate: 4 percent of compensation


  • Full retirement eligibility: Can retire at age 65 with any amount of service, or at any age with 25 years of continuous service
  • New contribution rate: 4.5 percent of compensation

In addition to these differences from the old plan, the fire and police departments have agreed to eliminate their 401(a) match for current employees and future employees. The 401(a) match is similar to the 401(k) match for city employees.

Both departments have also agreed to reduce benefits for new employees hired after Oct. 1. 


Despite these changes, Third Ward Councilman Gary Kespohl said that the unfunded pension liabilities will increase for approximately three more years. However, it will start to decrease afterwards. 

First Ward Councilman Fred Schmidt said the new plan will make workers rest easier because benefits will not be significantly decreased. He said that because these changes are being implemented without increasing taxes, taxpayers benefit as well.

Sixth Ward Councilwoman Barbara Hoppe said this plan shows the beauty of Columbia and how the new plan is a result of positive collaboration. 

No opposition to the new pension plan was shown during council discussion.

What's next: 

The new pension plan report will be moved to a public hearing for a future council meeting.

Supervising editor is Ted Hart.

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