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Contract: Employees to pay part of pensions

New agreement for city workers also creates a two-tier system, with current employees contributing 3.5% and new employees paying 7%.

December 15, 2011|By Joanna Clay

Laguna Niguel city employees are being asked to contribute to their pensions for the first time in city history.

As part of the contract the City Council approved Dec. 6, beginning June 29 the current full-time employees will contribute 3.5% of their salary to their pensions. A year later, on June 28, 2013, the contribution will double to 7%.

Anyone hired after Oct. 1, 2011, will contribute 7%.

In the new year, the city will also begin to provide a less generous retirement package for its new employees. As of right now, employees get 2% at 55, based on the highest 12 months of compensation. In 2012, the plan will give new employees 2% at 60, based on the highest 36 months of compensation.

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This change means employees have to work five more years to max out their pension.

However, the city also approved salary increases and bonuses. Employees will get a 2.75% increase on Dec. 30, 2012, and again on Dec. 28, 2013.

Employees will also receive lump sum bonuses of 1% on June 29, and June 28, 2013 — the same days their pension contribution increase goes into effect.

City Manager Tim Casey said the changes will go into effect "as soon as practical," but added that it takes three to four months to process a California Public Employees' Retirement System contract amendment.

The two recognized bargaining units that represent city employees are the Maintenance, Clerical and Technical Unit and the Middle Management, Professional and Supervisory Unit, both part of the Orange County Employees Assn.

Laguna Niguel's increase in employee contribution reflects changes happening in other cities across the county and the state, such as Costa Mesa and Newport Beach, as cities attempt to lessen pension burdens.

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Community room rental policy still in works

In other news, the council did not reach a consensus regarding a rental policy for City Hall's community room.

The council debated several issues associated with the rental policy, such as if alcohol should be permitted, if nonprofits should be charged or if it should be free to all residents.

The community room has no policies and is not yet available to the public for use, according to Casey.

Casey will work with Mayor Paul Glaab and Councilman Gary Capata to devise a set of regulations for the room.

joanna.clay@latimes.com

Twitter: @joannaclay

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