Chattanooga’s municipal electric utility may be owned by the government, but when EPB competes for new hires most workers compare EPB with other private companies.
In such a labor market, EPB directors Friday decided to switch the type of retirement benefit plan it offers new hires, starting in 2022, to be more comparable with other private employers rather than other government agencies.
EPB will replace its defined benefit pension program, offered to employees after five years of employment at EPB, with an enhanced 401(k) retirement savings program for new EPB employees hired after Dec. 31. Existing EPB employees and retirees will not be affected by the change.
Although EPB expects the change will save the utility up to $25 million over the next 25 years, EPB says it isn’t making the change due to any insufficiency in its retirement fund. Bill Witt, an actuary for Witt Management Consultants, said EPB’s existing pension plan has more than $76 million in assets and is actuarially sound for the future.
“Your plan is very healthy,” Witt told the Electric Power Board Friday.