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Council approves Tier 1 status for city employees

The Hartselle City Council Sept. 8 approved a resolution that will change the status of all city employees from Tier II to Tier I employees in the Alabama Retirement System. This change, according to Mayor Randy Garrison, offers multiple benefits to the City of Hartselle and its 108 fulltime employees. 

Gov. Kay Ivey last year signed Senate Bill 147, allowing municipalities, counties, school boards and other organizations that have chosen to participate in retirement options through Retirement Systems of Alabama the option to move Tier 2 employees and all new hires to Tier 1. 

Garrison said other municipalities in Morgan County have already made the change, and it will help city departments in their recruitment efforts.  

“The biggest reason for me is the benefit for recruitment purposes,” he said. “If someone is trying to choose between Hartselle and Cullman to go to work as a fireman, and Cullman is Tier I and we’re Tier II, they will go to Cullman.”  

The differences between Tier I and Tier II are outlined as follows:  

Contribution rates: 

Tier I             Local employee – 7.5 percent          Certified police and fire – 8.5 percent 

Tier II            Local employee – 6 percent             Certified police and fire – percent    

Retirement Eligibility 

Tier I – 25 years of service any age or age 60 with 10 years of service 

Tier II – Age 62 with at least of 10 years of service 

Retirement Factor 

Tier I – 2.0125 percent per year of service 

Tier II – 1.650 percent per year of service 

Average Final Salary 

Tier I – Average of highest three years of the last ten years 

Tier II – Average of highest five years of the last ten years 

Benefit Cap  

Tier I – None – 80 percent of average final salary achieved in 39.75 years 

Tier II – 80 percent of Average Final Salary (48.5 years to get to cap) 

Melee Laney, the city’s human resources administrator, said the new sick leave conversion allows an employee to transfer unused sick leave hours to service credit at their retirement, and the police and fire bonus year allows certified police and fire officers to receive an extra year of service for every five years they work – so if they work 25 years, they can retire with 30 years of service. 

Laney also said a benefit of the change is that it will help the city retain its employees and help Hartselle avoid becoming a training ground for new employees who would work for two years and go on to job that offered Tier I benefits.  

Garrison agreedadding while the change will cost more for the city and its employees, those who invest in the retirement system are “investing in their future.” Laney said the estimated cost is about $10,000 for the first year.  

Public safety recruitment  

Hartselle Police Chief Justin Barley said it is becoming increasingly difficult to recruit new officers for HPD, and this change will be a “tremendous benefit” to their efforts.  

With all our neighboring governments already making the decision to convert to Tier I, the task of filling vacancies with quality candidates would be almost impossible had the city opted to stay with Tier II,” Barley said. “We would also face the risk of losing our current Tier II officers to other departments that offer Tier I benefits.”  

Barley said the change will help his department retain the veteran officers it has.  

We have several veteran officers nearing their eligibility for retirement, and it will be more important than ever to retain officers who can build the experience needed to step into leadership roles as they become available,” he said. “I also believe experience equals safety. There is just no substitution for experience, and the community benefits from having welltrained and experienced officers keeping them safe. 

Because this change will impact the age at which someone can retire, Barley said his officers will benefit on an individual level, as well. “Take the scenario where a 21-year-old begins their career as a police officer with HPD. Under Tier II, they would have work until they reached the age of 56 to be eligible to retire,” he said. The same employee working under Tier I can retire at the age of 46 when they have 25 years of service, which would reduce their length of service by 10 years.  

Law enforcement is a very high stress and potentially hazardous career. This 10-year difference can be very valuable for the quality of life of the officer at retirement. Additionally, our city benefits from having healthy officers keeping them safe.   

Another advantage, Barley added, is the amount of retirement benefits the officers working under Tier 1 would draw upon retirement. They will see a significant increase in their retirement checks, plus, they now have the ability to count unused sick time as service credit. This is a great benefit for both the employee and employer and can aid in deterring the abuse of sick time.”  

Barley said he is extremely happy about the change and truly grateful to everyone in our city who worked to make it happen.   

I know this was a decision that had to be carefully considered before being implemented, Barley said, but I absolutely believe it was the right call and will be a benefit to our community for many years to come.”