By Lisa Barron
The last county in Delaware to provide employees with contribution-free pensions
has voted to end that practice.
The Sussex County Council on Tuesday approved an ordinance requiring any employee hired after Jan. 1 to pay 3 percent of their salary into a pension fund after they receive their first $6,000 in wages each year, reports the News Journal.
Until now, the county's pension fund was financed through tax revenues and investment gains. Finance director Gina Jennings said the new contribution mandate would take about $1,250 a year from a new employee's wages
, according to the newspaper.
The move reportedly does not have to do with a shortage of pensions funds; instead, it is the result of a growing number of retirees who are on the plan.
"It does seem like it's appropriate in these times" to end the no-contribution policy, Councilman Vance Phillips said, according to the News Journal.
He also raised the possibility of going even further making current employees pay the 3 percent contribution
, or moving away from a pension system to a 401(k) system.
Delaware State government workers hired before 2012 contribute 3 percent of their salary above $6,000 to pension plans, while state workers hired since 2012 contribute 5 percent.
Originally published on BenefitsPro.com