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Implementing Mandatory Employee Contributions

Guest kodle

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Guest kodle

One of my special district clients with a long-standing defined benefit pension plan (fully funded, fortunately) would like to implement mandatory employee contributions (to be picked up by the entity) for all participating employees. They are proposing a 3% contribution in years 1 and 2 with an increase to 4% in years 5 and 6 (the increased percentage being applicable to all then-current and all new employees), a 5% mandatory contribution requirement in year 7 and possibly going to 6% in year 8. This seems a bit rich to me. What are you seeing out there, anything higher than 3-4%? Does anyone have a similar schedule of automatic increases? Thank you for your thoughts.

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