| OCR Text |
Show Vernal City Council defies recent state retirment fund legislation The Vernal City Council defied recent legislation by the Utah State Legislature making it illegal to withdraw from the Utah State Retirement Fund, by giving city employees the option to join an alternative alter-native retirement system. At the regular Vernal City Council meeting, Wednesday, March 2, 1983, the council voted to join 40 other cities in the state who have already given their employees the option of remaining in the State Retirement Fund or joining an alternative program. Prior to the Utah State Legislature passing the bill making such a move illegal, il-legal, which was passed on Feb. 21, 1983, the City Council had tentatively decided ifor all city employees to choose between a program with New York Life Insurance In-surance Company or to remain in the State Retirement Fund. At the meeting on March 2 the City Council decided to continue with their plan, even though the law must now be tested in court to see if it is constitutional. The bill passed by the Utah State Legislature is retroactive to January 1, 1982. No agency withdrew from the State Retirement Fund until July of 1982. This, in effect, makes it illegal to have ever withdrawn, and brings all state agencies back into the State Retirement Fund. The bill is effective for one year, to give legislators time to study the problems with the present retirement fund and see what they can do about it. Utah State Representative from Uintah Uin-tah County, Gayle McKeachnie, said the problem is that all older public employees will remain in the State system, while younger emDlovees will withdraw. This leaves a situation when all older employees retire, the state will be paying out all this retirement money, and since all younger employees have withdrawn into another system, there will be nothing coming in. "In effect, ef-fect, it bankrupts the system," McKeachnie said. Vernal City has reports that providing their employees with the option won't bankrupt the state. The 40 other cities and organizations which have heretofor withdrawn from the state system are planning a class action ac-tion suit against the bill, claiming it is unconstitutional. un-constitutional. However, Vernal City attorney at-torney Lynn Payne questions the possibility of such an action. A class action ac-tion suit can only be brought when there are too many parties to be identified. Payne said 40 cities are not enough to be unidentifiable. Payne believes one city will need to test the constitutionality. McKeachnie believes the same. In order to over-turn the bill, it must be heard by the Utah Supreme Court. It has been the contention of the entities en-tities which have withdrawn from the State Retirement Fund, that public employees deserve a better deal than the Fund offers. Alternative programs, such as the one agreed to by the Vernal City Council will pay at least 12 percent interest in-terest to all funds they collect. Currently the State Retirement Fund is gathering only 7.5 percent interest. The alternative retirement plan offers of-fers benefits which far overweigh the benefits of the state program, said Kenneth Ken-neth Bassett, Vernal City Manager. If an employee retires before sixty-five, sixty-five, as is the case with 95 of Vernal City Ci-ty employees he only receives half of the money put into his retirement fund, where the private policy will reimburse 100 of the money put into the system if the employee is in the system over five years. |
