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City of Atlanta Pensions and 2011 Pension Plan Changes

The following information was obtained from a July 1, 2011 Atlanta Journal Constitution article written by Ernie Suggs. The article is titled “Pension fix eases budget.”

If you have already retired from the city of Atlanta:
The legislation makes no changes to the benefits of retired city employees.

If you are a current city employee in the Defined Benefits plan (general, police, and fire employees):

  • The legislation allows you to remain in a traditional pension plan.
  • Your contribution of compensation to keep your existing benefits increases by 5 % to 13 % if you have beneficiaries and 12 %if you do not.
  • The multiplier, the rate at which employees accumulate future pension benefits, will be 3% for police officers and firefighters; 2.5 % for general employees; and 2% for anyone hired after July 1, 2011.
  • You will have a vesting period of 10 years, but if you were hired after July 1, 2011 the vesting period will be 15 years.
  • You can retire at the age of 55 if you fight fires or crime. Otherwise, you retire at 60.
  • You will have no minimum retirement age, but you will be penalized for retiring early.
  • The penalty for retiring early will be 6% per year for the first five years before normal retirement age and 3% per year thereafter.
  • Your cost of living adjustment will be capped at 3%.
  • Your salary calculation will be based on the highest consecutive three-year average.

If you are a new city employee:

  • You will be placed in a hybrid plan composed of both a reduced traditional pension and a 401(k)-type plan, similar to those offered to private sector employees.
  • In the traditional pension portion of the plan, you will have a 1% defined benefit multiplier and an 8% mandatory employee contribution.
  • In the 401(k)-type plan, you will have a 3.75% mandatory employee contribution that will be matched 100% by the city. You will have an option to contribute up to an additional 4.25% which will also be matched 100% by the city.
  • In the Defined Benefits plan, your vesting period is 15 years. In the 401(k)-type plan, your vesting period is 5 years.
  • Unlike current employees, you have to wait until you are 57 years old to retire if you are a firefighter or police officer. If you are a general employee, you have to wait until you are 62 years old.
  • If you want to retire early, you have to be 47 years old if you are a firefighter or police officer and 52 years if you are a general employee.
  • The city will take 6% per year if you want to retire early.
  • Your cost of living adjustment will be capped at 1%.
  • Your salary calculation will be based on the highest consecutive 10-year average.