Q: I hear there are changes to police and fire retirement. How do these changes affect Gilbert?
A: Yes, police and fire employees who are hired after July 1, 2017, will have modified retirement benefits and they will contribute 50/50 (equal proportion) with the Town of Gilbert toward funding their retirement benefits.
Q: How is this different from current police and fire?
A: In July 2017, police employees in Gilbert will pay 11.65% of their salary toward retirement while the Town will pay 33.69%. In fire, the employee will pay 11.65% compared to the Town’s 23.49%.
Because of a recent court case, public safety employees hired on or before July 19, 2011, will pay a fixed 7.65% and the Town will pay everything else to fund the retirement benefits.
These employees will also be given a refund for contributions made above the 7.65% level between 2011 and 2017. These refunds are about $5.2 million dollars for Gilbert (not including interest, which will be added when the courts provide clarification). Compared to our regional peers, Gilbert’s refund amount is manageable and the Town will cash fund the obligation in the coming budget year.
Cash funding the refunds will help keep the unfunded liability from growing. Unfunded Liability represents the amount of promised retirement benefits that are likely to be paid out, but for which money has not been set aside. Gilbert is working hard to close this gap and plans to be fully funded in the next 5 years. This is just one way that Gilbert’s Council is working to be fiscally responsible and wise with taxpayer funds.