NAUGATUCK — The borough’s firefighters have a new contract and a new pension plan.
The Board of Mayor and Burgesses approved a new contract for the firefighters union during a special meeting on Thursday.
Prior to this contract, the borough’s fire department was the only department that was not on a 401(k)-style pension plan. This contract, however, brought the fire department in line with the rest of the borough’s departments.
“Essentially this contract is consistent with what we’ve done in other bargaining units by which we’ve given modest pay increases in exchange for healthcare concessions and, in this case, the final change to the pension, with new hires going into the firefighter’s contribution plan,” Mayor Robert Mezzo said.
The contract, which is effective retroactively from July 1, 2012 through June 30, 2015, has two major changes in it — wages and pensions.
The contract includes wage increases of 2 percent this year, 2.5 percent in 2013, and 3 percent in 2014.
That means that firefighters, whose salary was $54,199.64 last fiscal year, is $55,283.63 this fiscal year, $56,665.72 next fiscal year, and $58,365.70 the following fiscal year, according to the Naugatuck Fire Fighter’s Union’s Fiscal Analysis.
According to the contract, all firefighters that are hired on or after July 1, 2012 will take part in the borough’s defined contribution plan. Under this plan, the borough will contribute a maximum of 3.75 percent annually of employee’s total wages, excluding private duty, tuition reimbursement and clothing allowance.
Mezzo explained that he could have gotten a wage freeze with the firefighter’s union, but would not have been able to get the concessions to the pension. The firefighters were the last department in the borough to switch to this pension plan.
According to Mezzo, giving wage increases in exchange for healthcare and pension concessions is more expensive in the short term, but saves the borough money in the long term.
“It’s something we should have started many years ago when the private sector began to make those changes,” Mezzo said.
An actuarial study shows the borough will start to save money in 2025 under the new pension plan, but Mezzo said that is the worst-case scenario and the borough could start to see savings as early as nine years from now.
The borough will also save money on health care for current employees and retirees, as their cost shares will increase and borough contribution to deductibles will decrease.
Mezzo explained that there is language written into the contract that prevents the pensions from being changed until 2051.