Arbitration Decision Issued in Long Running Westport Public Works Contract Negotiation

After the town’s  over the next thirty years because of errors made by a previous , Westport has begun to realign pensions for town workers and has significantly decreased the final pension amount Public Works employees will be able to collect from the town once they have retired.

The arbitrators agreed to two significant changes:

1. All new Public Works employees hired after the date of the award will join a defined contribution plan. 
2. With some exceptions, the maximum benefits payable to current employees under the existing defined benefit plan will be capped at 65 percent of ending salary, rather than the present 81.25 percent.

“This negotiation and arbitration took three years to complete, but the result is very good for Westport,” said Board of Finance Vice Chair Helen A. Garten. “Both the defined contribution plan for new employees and the 65 percent cap on defined pension benefits are important steps toward achieving a sustainable benefits package that works for both taxpayers and employees.”

In awarding the town's request for defined contribution plans for new public works employees, the arbitration decision notes that Westport's pension costs have increased more than 1000 percent in the last five years alone and that there is a "clear and overwhelming trend toward defined contribution plans in the public sector."

“I am pleased that we were able to achieve a benefits cap in arbitration, because reforms like this can lower our pension costs in the short run, reducing the town's actuarial liability and annual pension contribution,” Garten said. “The financial impact of this and the other changes have to be determined, but this is a paradigm shift that will set the stage for future union negotiations.”

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Regarding the 65 percent pension cap, the decision says that "it is important to emphasize that, shockingly, the current pension calculation permits employees to retire and collect up to 81.25% of their Final Average Compensation." Capping retirement benefits at 65 percent of final year's salary is more in line with other Fairfield County towns yet still provides employees with a significant retirement benefit, according to Garten.

“We still have a long way to go, so we can't afford to lose momentum,” Garten said. “This decision covers only one of the town's six pension agreements. Fairness to our taxpayers and to all our employees demands that we work toward comprehensive benefits reform in all of the pension plans, union and nonunion.”

There were other contested issues as well, but these are the two pension-related changes for Public Works employees. These changes apply only to members of this particular pension plan and union. Westport has four union pension plans and two nonunion plans.