Defined-Benefit Retirement Plans and Contribution Offset Elimination FAQ

What is retirement contribution offset elimination and why is it happening?

The Public Employees’ Pension Reform Act of 2013 requires employees begin paying more for their defined-benefit retirement plans as mandated by state law. Because of this, as stated in the Memorandum of Agreement with the County of San Diego, “effective June 9, 2017, the County’s retirement contribution offset shall be eliminated for all bargaining units.”

How did the County make up for the retirement contribution offset elimination?

The County used funds previously contributed to employees defined-benefit retirement plans toward a wage and benefit increase. However, employees who have worked at the County longer and are in the Tier A or B of the retirement plans had a greater County contribution, so they were impacted by this change more than newer employees in the Tier C retirement plan.

How did your union address the retirement contribution offset elimination during bargaining with the County in 2017?

Your SEIU Local 221 bargaining team discussed and voted on whether to move forward with a grievance based on the way the County was distributing the retirement contribution offset. The County was giving this offset to all employees instead of those most impacted by the change, in the Tier A and B defined-benefit retirement plan. However, the team knew a “win” would take money from newer members and give it to others. Instead of dividing the bargaining units and taking money away from newer employees with a grievance, the bargaining team accepted the County’s implementation of its plan.

How does this decision impact employees in different bargaining units?

Employees represented by a small association decided to file charges against the County because of the way it was implementing the retirement contribution offset. They “won,” clawing back money by forcing their newer Tier C members to return money the County already paid them. Some of this money was given to their Tier A and B members.

Still have questions?

Contact SEIU Local 221
4004 Kearny Mesa Road
San Diego CA 92111
(858) 560-0151
SEIU221.org

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