The city of Spokane and the unions that represent most of its employees took a step in the right direction when they made adjustments to the retirement-pension plan in an effort to make it more sustainable, rather than simply dumping more taxpayer money into it.

While it would have been good to see the city make the adjustments without having to spend any more money from taxpayers—most of whom don’t have the luxury of a pension—it’s good to see concessions being made.

Starting Jan. 1, the city’s employees will increase their contribution to the pension plan to 8.25 percent of total pay from 7.75 percent, and the city will match those contributions to the plan. 

That change alone is expected to take the projected funding level of the pension plan during the next 30 years to about 95 percent of what will be needed from a recent low projection of 65 percent. 

The city had committed to the increase, but as city administrator Theresa Sanders put it, “We wanted to slow the faucet on the back end too.” 

To that end, the city and its unions agreed to a series of changes to pension rules for employees hired after Jan. 1, 2015. In general, new workers will have to work longer or until they are older to receive full retirement benefits. Full-retirement age for city employees increases to 65 from 62. Employees will have to work for the city for seven years, rather than five, before being fully vested in the pension plan. 

Also, the rule of 75 will become the rule of 80. What that means is that employees currently can retire with full benefits early if they are 50 years old or older and have worked for the city for at least 25 years. New hires starting in 2015 will be able to be able to retire early at 50 years old or older after 30 years on the job. 

To be sure, city employees will continue to receive healthy retirement benefits. Many in the private sector may look at these details with envy. But the compromise between the city and its employees should slow rising costs and help bring public employees’ benefits more in line with the private sector. 

Tim Dunivant, interim director of the city’s retirement department, said the city didn’t get everything it asked for when it started conversations with the unions about pension changes a year and a half ago. But he points out that it came a long way from initial talks about simply bumping up the city’s contribution amount. And it did so without having to enter into formal negotiations.

Sanders puts it another way: “We’ve made dramatic changes in the pension plan without drama.”

Dunivant says he still has some concerns about the pension plan’s sustainability. For example, the plan’s funding projections assume a 7.5 percent return on investment, and that might be “optimistic,” he says. 

For the sake of the economy and all of our investments, let’s hope that a 7.5 percent return is achievable. But if further tweaks must be made, the city should look for ways to adjust its outflow once again, rather than reaching deeper into taxpayers’ pockets.