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Officials look for ways to save on retirement benefits

A new study group is exploring options to ensure the retirement plan for Washington County employees does not become cost-prohibitive.
“The total compensation cost in Washington County is far greater than the private sector,” Mayor Dan Eldridge told Commissioners Lee Chase and David Shanks during the group’s Jan. 26 organizational meeting.
“We’re looking at every element that will bring some balance and enable us to remain competitive.”
Recommendations from the Mayors Retirement Study Group will be taken to the Compensation Subcommittee recently appointed by Commission Chair Greg Matherly to conduct a salary study.
The current retirement plan with Tennessee Consolidated Retirement System has the county paying the full amount of the contributions, which equates to 14.67 percent of every dollar earned. The structure does not allow employees to contribute.
Any changes Washington County makes to the retirement plan going forward would apply to new hires only. Employees who are already enrolled would not be affected.
“Eighty (new) employees were placed on the county payroll last year, the majority in the sheriff’s department and the jail,” Eldridge said. “There was basically no turnover in the other offices.”
Washington County also has 84 employees now eligible to retire, and 38 employees who are older than 65.
“We need to look at the effect the employee census is having on the cost of TCRS for Washington County,” Eldridge said.
The average age of county employees is 47, nine years older than the average age of county residents.
“Fifteen years out, our cost for retirement contributions will more than double,” Eldridge said.
Weekly meetings of the Mayors Retirement Study Group will be held on Thursdays at 4 p.m. in the Washington County office building on Main Street.
The goal is to come up with recommendations by the end of March.
Assistant Johnson City Manager Bob Wilson will speak at the Feb. 2 meeting regarding the city’s move to a defined contribution plan, in which the retirement benefit is based on an accumulation of funds in the account and the income those funds will generate.
Washington County is now under a defined benefit plan with TCRS that uses a benefit formula rather than an account balance.
In most cases, the benefit is affected by the employee’s length of service, final average salary, and the Social Security integration level in the year the employee retires or dies. The average final compensation is the average of the employee’s five highest consecutive years of salary.
Under the county’s current plan, employees who leave after one or two years of service don’t receive a retirement benefit, yet the funds paid in to TCRS are not returned to the county.
Eldridge said the county could save a significant amount by having different health insurance and retirement plans during the first two years of employment.
“We need to begin bending the curve in the next five years or the cost will be out of control,” he said.