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BOMA nixes SSI buyback


Farragut’s Board of Mayor and Aldermen opted not to buyback Social Security for Town employees at its meeting Thursday, Oct. 13.

The vote was one of a long chain of actions taken this year by the Board, all in the hopes of revamping the Town’s inadequate retirement system.

“We may be learning why this decision has been kicked down the road for 30 years,” Mayor Ralph McGill said during the meeting.

Earlier this year, the Board voted to rejoin Social Security, after having opted out in the early 1980s. That decision, however, left several Town employees in a lurch because of a “windfall elimination provision,” which essentially penalizes people who once contributed to Social Security and then took a job in which they opted out of it.

According to Town administrator David Smoak, the windfall provision penalizes people $38 each month for every year they fall below the minimum contribution level of 30 years.


But in the end, Smoak recommended the Board not buyback Social Security for Town staff.

“It would be a handful of people you’d truly be affecting,” he said, and how much they would be positively affected is unknown.

Alderman Ron Honken agreed.

“You cannot add time for some of these folks. We could spend the entire annual budget and still not get some people where they need to be,” he said.

“There is not enough money in this community to fix this problem,” he added.

In keeping with “Robert’s Rules of Order,” Alderman Jeff Elliott moved to buyback Social Security; Honken seconded, and the motion was unanimously denied.

“Robert’s Rules of Order” does not allow negative motions.

The Board’s vote set in motion the timeline for an employee vote expected in January, in which each employee will be able to decide individually whether or not to join Social Security.

The vote also set off a wave of confusion among Board members on a series of other retirement packages put together by Smoak as possible supplements to the Town’s new retirement plans.

“I just don’t get it,” Alderman Bob Markli said of Smoak’s retirement scenarios.

Six of the scenarios reflect various one-time payments to employees, largely calculated according to years of service, percent of pay and age.

The seventh scenario would be an ongoing supplemental program that would allow employees to contribute a greater percentage of their salaries to retirement the longer they worked for the Town. The Town would then match whatever they contributed, with a cap of 10 percent.

Under that scenario, the Town wouldn’t contribute anything unless the employee did, and an employee would have to work for the Town at least five years before being eligible. If the plan was implemented immediately and every eligible employee contributed, scenario 7 would cost the Town $51,905 this year.

Vice Mayor Dot LaMarche proposed the Town implement scenarios 1 and 7, but because her proposal wasn’t on the agenda, no vote was taken.

She requested instead that the Board vote on the retirement scenarios at its meeting Oct. 27.

“There is not a time machine. We cannot go back in time and change this problem,” Honken said.

“We can’t save everybody ... but we can set our sails to allow people to retire from this community in the future,” he added.

 

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