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Monday, August 22, 2011

Is this a time for a COLA? - Some councilors question pension cost-of-living adjustment

As published in the Record Journal on August 21, 2011

By Russell Blair
Record-Journal staff
(203) 317-2225

WALLINGFORD — The Town Council voted last week to approve a 1.5 percent cost-of-living increase in pensions for retired town employees, but some councilors questioned the decision at a time when many current town employees face a wage freeze.

Personnel Director Terrance Sullivan said town employee union contracts require the council to consider a cost-of-living increase every three years. In the past, the increases have been 3 percent, but Sullivan said Tuesday the 1.5 percent figure was a compromise given tough economic times.

“We decided on an increase of less than 3 percent but more than zero,” Sullivan said.

Sullivan said there are 406 retirees and beneficiaries in town, and 310 will be affected by the increase. The increase, which won’t go into effect until next year, will initially cost the town $93,215.

Councilor Craig Fishbein, a Republican, voted against the increase because he felt it wasn’t the right economic time for an increase in pension payments.

“We take the position of no wage increases for current employees, but increase pensions by 1.5 percent for past employees,” Fishbein said.

Fishbein also questioned the language of the contract, and whether or not it would be possible for the council to approve an increase, but delay the start by a year. Some councilors who voted in favor of the increase did so because they didn’t want pensioners to go five years without a cost-of-living adjustment. John LeTourneau, a Republican councilor, voted in favor of the increase.

“In these tough times, people living on a town pension, that’s all they get,” LeTourneau said.

As for the current employees with no wage increases, LeTourneau said that – for the people working – he felt the wage freeze will eventually be negotiated.

“They’re going to get their raises,” LeTourneau said.

Some councilors asked about an annual review for cost-of-living adjustments, but Sullivan said that, given the contract language, it wasn’t possible. Sullivan added that since the raises compound every year, a 1 percent increase for three consecutive years would cost the town more than a 3 percent increase every three years.

Fishbein said that he was worried the increases would affect the budget not just this year, but in subsequent years too. Sullivan said that his staff was still extrapolating the data to estimate how much it will eventually cost the town.
There hasn’t been a cost-of-living adjustment for Social Security recipients since 2008, a fact that Fishbein said shows it’s possible for town retirees to get by on their current pensions.

“Look at all the seniors on Social Security who haven’t seen an increase in two years,” he said.

Nick Economopoulos, a Democrat, also voted against the cost-of-living increase.

“The people that are paying for this increase can’t afford to put food on the table,” Economopoulos said. “I just don’t think it’s the right time.”

LeTourneau said that in the grand scheme of things, the increase doesn’t result in a lot of extra money. Going five years without an increase, he said, is “just not right.”

“I don’t think it’s fair to penalize the retirees,” LeTourneau said.

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