Allen County Employees Brace For Deduction From Paychecks

By Jeff Neumeyer

August 11, 2011 Updated Aug 11, 2011 at 5:56 PM EDT

ALLEN COUNTY, Ind. (Indiana's NewsCenter) --- A tough pill to swallow for many of the 1,200 people working for Allen County Government.

They haven’t had much of a pay raise in several years, and now a change has been ordered that will impact their retirement savings.

Allen County Council members are focused on cutting about $5-million out of next year's budget, and Thursday they started by telling county employees they will now have to make a contribution to their own long-term retirement fund.

In a close 4 to 3 vote, county council voted to deduct three percent from each county employee's paycheck starting January First.

Dating back to the 1980's, a mandated 10.25% contribution to the Public Employees Retirement Fund, or PERF, on behalf of each county worker, was paid entirely by county government.

Now three percent of the amount will come from those workers instead.

It amounts to a pay cut.

County Council Member At-Large, Paul Moss, voted against the change, saying it should have been phased in over time.

Paul Moss/(R) Allen County Council At-Large: " I think it would have been a little bit easier on the employees, but also would have forced department heads to look a little bit harder within their budget to find some cuts."

Darren Vogt/(R) Allen County Council President: " The dissent was really that we did it all at once. Some of them wanted to phase it in over a two or a three-year period and really to have any budget impact, it really needed to be done all at once or not at all."

Benefit cuts have been impacting workers in the private sector as well.

But if a company cuts a matching contribution to a 401-K plan, for example, the worker is not required to make up the difference.

In this instance, the retirement fund contribution is mandatory, meaning the county employees cannot opt out of the contribution.

The change is expected to save county government approximately $1.2 million in 2012.

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