Business Groups’ Recommendations for AFSCME Deal

Recommendations from leaders of five business groups for changes in the state’s contract with the American Federation of State, County and Municipal Employees include:

* Increasing the full retirement age for new employees to 67, though allowing for early retirement starting at 62. The current rule says an employee can retire with full benefits if his or her age and years of service add up to 85.

* New employees, when they retire, would be eligible for annual cost-of-living pension increases of the lesser of the rise in the Consumer Price Index increase or 2 percent. Retirees now receive a flat 3 percent increase annually.

* Larger employee contributions to their pension funds. The letter doesn’t specify an amount. State employees who also pay into Social Security generally contribute 4 percent of their salary to state retirement funds. Those not paying Social Security contribute 8 percent. Some state workers, such as state police, contribute as much as 12.5 percent.

* Creation of a retiree health-care trust fund to which the state would contribute annually. That would provide a dedicated source to pay such costs.

* Require retirees to contribute toward their own health insurance premiums. The state now pays 5 percent of the retiree health-care premium cost for each year of an employee’s service. For retirees who worked for the state for 20 or more years, the state pays the full premium.

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