New Haven Independent

The announcement came in a letter to the Board of Aldermen, presenting the city’s new policy for executive management and confidential employees. These are the non-union employees, such as department heads and the mayor’s staff.

Starting July 1, 2008, the city made a policy switch: Executive managers hired after that date would not be added to the city pension plan, which is called CERF (City Employees Retirement Fund). Instead, the new hires would be added to a plan that has defined contributions — not defined benefits.

The city hired Hartford Life to administer the new Defined Contribution Pension Plan, which acts like a 401(k). So far, only 10 city workers have joined the plan, including the police chief and assistant chiefs. A contribution equaling 13.7 percent of each worker’s salary goes toward the plan, as opposed to 20.33 percent in the CERF plan. That’s a savings of 6.5 percent per worker, according to budget officials.

In total, the city is saving $67,037 per year due to the pension plan switch.

The policy change is part of a larger attempt to curtail ballooning pension costs by shifting employees away from CERF. That shift was evidenced as recently as last week, when the mayor and the school board approved a new contract for a 12-person craftsmen union.

Changing executive management to the defined contribution plan was “the first step in eliminating the CERF plan in its entirety,” wrote Emmet Hibson, director of organizational development, in a letter to the board.