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Voice: More questions on IID retirement plan

June 11, 2001

How does the Imperial Imperial District avoid being held accountable for the retirement fund it told its employees would "provide a sound financial foundation in the form of a guaranteed income for life?" — quoted from IID policy and procedure No. 4292.

In 1985 our retirement plan was modified so employees no longer needed to contribute 3 percent of their wages. IID said it would pay our 3 percent plus the 4 percent it was already contributing into our retirement fund. At that time they also said they would repay our 3 percent paid into this account prior to 1985 at 4 percent interest. I never heard another word about our 3 percent (plus 4 percent interest) until I went to discuss my buy-out with a representative of our new provider. There I learned my 3 percent, finally, after 16 years, would be repaid but without interest.

Now I have learned IID never did pay into our retirement account any percentage of payroll. The only money paid into this account was for the projected cost to fund the next year's retirees. I don't believe I'm the only one who thought they were actually going to do as they said they would. Had they contributed as promised I don't believe our fund would be broke today.


Also, in this buy-out, our death benefit, which provided for an employee of 10 years that his or her spouse would receive 50 percent of that employee's wages for life, has been eliminated. Since the fund never even existed as an employee-funded retirement account, the district needed a way to figure each employee's buy-out cost.

Even though I was assured by the district spokesperson during a group meeting that this was not being treated as a massive retirement, the buck consultant assured me it was the same used to retire employees through Transamerica (our last provider).

By using this formula, employees are rewarded more for their age than years of service. I feel employees should be rewarded for 30 years of service just as much, if not more than, an employee at age 65 with only half the years of service. After all, they are the ones whose wages paid for, or should have paid for, this account.

Now the district is promising to pay 7 percent of our wages into our new retirement plan, which we can contribute to … after taxes! Who is going to see that they do? I feel I need somebody I can be sure is looking out for my best interests and looking over the fine print of all this before I sign anything. Before I can trust my financial future to the world of IID again I need some answers.

Every time I learn more about this plan, and the way the last one was treated I have more questions, and feel more strongly that somebody should be held responsible.



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