The Naugatuck Fire Fighters Union Local 1219 will receive salary increases of 2 percent, 2.5 percent and 3 percent over the next three years. In exchange for the wage increases, firefighters agreed to changes to their pension calculations, according to a new contract approved Thursday by the Board of Mayor and Burgesses.
As many Naugatuck municipal unions have done, the firefighters agreed to changes in pension plans that make their retirement savings similar to 401-K plans in the private sector, in which employees contribute to their retirement plans. Those plans will be in place for all new hires within the fire department. All current members are entitled an annual pension equivalent to 75 percent of their best three years if they serve 25 years; it is less if they retire earlier.
Naugatuck Mayor Bob Mezzo has been pushing for the new, so-called "defined contribution plans" - in which the borough's annual contribution is specified - because it will save the borough significant money in the long term. In such a plan, only the employer's contributions are guaranteed, not the future benefits, according to Wikipedia.
Under the new contract, the borough is expected to start saving money in the year 2025. (See a fiscal analysis of the contract, as well as a full copy of the pact, attached to this article as PDFs. Mezzo provided both to the local press.)
The new contract is expected to increase the borough's costs $402,000 over the next three years, according to the fiscal analysis study provided by borough Controller Wayne McAllister.
The fire contract was unanimously approved by the borough board on Thursday and was also ratified by the union Thursday. The contract is likely to be signed by both parties soon.