By NEAL WAGNER / City Editor

A Pelham city retiree and former mayoral candidate said he is satisfied with changes the Pelham City Council recently made to its retirement benefit package.

During its March 7 meeting, the council voted unanimously to change health insurance benefits for retired city employees and their surviving dependents. The issue had been on the council’s work session agenda for a few years, said Gary Waters, the city’s retired fire chief and a former mayoral candidate.

“That thing has been on their agenda since 2008,” Waters said. “I’ve been to almost every council meeting since then, and that is a big reason why I always came.”

As a result of the changes, the city will begin contributing 50 percent of a normal group health insurance rate premium, or up to $850 per month for family plans and $450 for single coverage, for employees who are hired after April 1, 2011 and eventually retire.

For current city retirees and city employees hired before April 1 who go on to retire, the city will pay up to 80 percent of a normal insurance group rate premium, which is part of the retirement benefit plan the city has had for many years.

“You, as the city, have a duty to uphold the obligation you made to these employees when they were hired,” Councilman Steve Powell said of employees and retirees hired under the old benefit plan. “You’ve got a duty to stand next to what you promised those people when you hired them.

“(If we changed the retirement plan for current employees and retirees,) it would be like if you got hired, and then one day they came back and said they had to cut your salary after they hired you,” Powell added. “And you say ‘Hey, I just bought a house.’ That’s not right.”

The changes also removed the earning cap for city retirees to still be able to receive city retirement benefits.

“I’m glad they removed that earning cap,” Waters said. “To hold me to $22,000 a year to still be able to get benefits, that’s ridiculous.”

The new retirement plan will also remove what Powell said was an “inequity.”

“Under the current plan, we had a situation where an employee could work here 10 years and get the full retirement package,” Powell said.

Under the new plan, employees who work for the city 10 years and then retire will receive 40 percent of the amount of benefits the city pays for city retirees who worked at the city for 25 years.

If a city employee retires after 10 years and begins drawing city retirement benefits, the retiree will receive slightly higher city benefits every year they are retired until they are eligible for full city benefits at year 25.

“That closes a loophole, and an inequity in my opinion,” Powell said.

Waters said he is glad the city decided to keep the benefit package the same for those who have already retired from the city.

“Do I approve of what they did? Sure. They lived up to their obligation,” Waters said. “Those of us out here who worked for the city in the past, the current government is standing on our shoulders.

“The economy is changing every day,” Waters added. “I think they did the right thing.”