City retirees want payout; state allows lump sum payment

City retirees want payout; state allows lump sum payment

State legislators recently passed a law that would allow cities to pay a one-time lump sum payment to retirees. And as WDHN's Valencia Jones explains, some local retirees want to cash in on the measure. But time is running out.
Dothan City Manager Mike West discusses the old city pension plan and the current RSA plan, which took effect in October 2004.
Dothan City Manager Mike West discusses the old city pension plan and the current RSA plan, which took effect in October 2004.
In order for city retirees to receive the one-time lump sum payment allowed by the state, the City of Dothan must choose to vote on the optional measure by August 31.
In order for city retirees to receive the one-time lump sum payment allowed by the state, the City of Dothan must choose to vote on the optional measure by August 31.
Former city employees under an old pension plan continue to receive a two percent cost of living adjustment every year.

But city retirees under the Retirement Systems of Alabama plan say, despite inflation, their pay has not changed.

"That happened October 2004.  So people who have been retired for nearly 10 years, in some cases, have not received any increase,” said former city internal analyst Valerie Harris.

State legislation passed this year allows cities to pay retirees a one-time lump sum payment.

It amounts to two dollars for every month of service and a minimum of $300.00.  But state lawmakers gave cities the option of participating, and the deadline to vote on the measure is approaching.

“How we take care of our retirees says a lot about our community,” Harris said.  “And if we continue to just push city retirees aside, and say ‘no, we're not going to do it,’ that's just not fair.  We're not valuing the people in our community when we do that."

"In the past because of the amount of money that we're paying, a lot more than the average person has been, the city commission has opted not to consider that,” said City Manager Mike West.

He says RSA retirees are getting a better deal, because the city is paying more into their fund than the old one.  He also says the city already owes the RSA more than 120 million dollars.

"Every time the state allows that, you know, obviously the employees want it,” said West.  “But you know, ultimately, it will be up to the city commission to decide how they want to proceed with this."

"All we want, the main thing we want from the city, is to put it on the administrative agenda, have it discussed, and make a decision and have a vote," said Harris.

West says Mayor Mike Schmitz would decide if the city commission would add this to their agenda, but Schmitz was not available for comment.

The deadline for the city to vote on the measure is August 31st.

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