Branford (Conn.) Police Department is returning to a defined benefit plan after roughly eight years of offering a 401(k) plan.
The reason: Its $950,000 defined contribution plan was hurting the department's ability to recruit and retain officers.
In 2011, the town switched its police department to a 401(k) plan from a defined benefit plan to reduce future investment risk, said a memorandum.
But since the DC plan provided participants with no disability pension, it became difficult for the police department to keep talented officers, said Stanley Konesky III, a sergeant in the Branford Police Department and president of the United Public Service Employees Union's Branford chapter.
"Certain towns are having a hard time keeping officers because they can't get their contracts down. It's a serious issue," Mr. Konesky said in a phone interview.
A report issued by the Center for Retirement Research at Boston College in May confirms this. The report, "Do Benefit Cuts Encourage Public Employees to Leave?" argues that while some state and local pension plans may feel the need to cut benefits for its employees, those costs could cause some employees to leave.
Although the police sergeant declined to provide specifics of the turnover that the department faced, he said about one-fifth of the police force have left to pursue other options over the past five years.
After two years of contract negotiations, the town and United Public Service Employees Union agreed to switch the police department back to a DB plan with a different benefit structure than that previous plan.
"It's worked out great for us," Mr. Konesky said of the switch back to defined benefit. "We've seen an influx of new applicants."
Branford Finance Department Director James Finch explained in an email that the DC assets will be transferred into the DB plan as they will be used to offset the liability. Further, DC participants will receive credit in the DB plan from their dates of hire.
The change back to the DB takes place immediately following the May 14 vote, Mr. Finch added.
