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The Sonoma-Marin commute rail agency, which expects to increase its workforce by five-fold within two years, is considering a pension plan for new employees that may be the stingiest among North Bay public agencies.

The plan would raise the age for full pension eligibility, eliminate the bolstering of pensions with such things as specialty pay and spread the risk of cost increases to employees.

"I think it's a lower plan than what I see most agencies going to," said Fran Elm, Santa Rosa's human resources director. "But it is still a good plan. I think people would be able to have a benefit that is sufficient to live on once they retire."

The proposal goes to the agency's board of directors for approval on Wednesday.

Valerie Brown, chairwoman of the Sonoma Marin-Area Transit district, said with agency about to ramp up employment, the timing is important.

"This is in keeping with the direction that all government agencies are going in," Brown said. "It is hybrid, it is probably what we will see throughout the state of California."

The agency's current employees, however, will continue with their existing plan, which provides more expansive benefits. SMART, by law and court rulings, cannot reduce promised pension benefits of workers already employed, said Amy Norris, a spokeswoman for CalPERS, the nation's largest public pension fund.

"For new hires, they can create a new plan and a lot of agencies are doing that, creating a second tier as a cost-saving measure," Norris said.

Public-worker pensions have become highly controversial because of rapidly escalating costs that burden tax-supported agencies, often forcing the curtailment of other services.

It has not become a crucial financial issue for SMART because the transit district has just 18 employees, said General Manager Farhad Mansourian.

Still, SMART's 2011-2012 budget contains $550,000 in annual pension contributions for its those workers.

The agency expects to hire 100 more employees within the next 12 to 18 months as it rebuilds its track, starts testing a rail car, operates freight service for the North Coast Rail Authority and prepares to run its own passenger trains.

Service between Santa Rosa and San Rafael is scheduled to begin in late 2015 or early 2016.

"In June, the kinds of positions we will be hiring are operations manager, access control manager, accountant, engineers, safety people, community outreach, and probably a few months later we will begin hiring operations people," Mansourian said. "The first trains will arrive in October 2013. It is right around the corner."

Highlights of the proposed plan for new employees include:

<BL@199,12,11,10>Applying 2 percent-at-60 formula, meaning a pension of 2 percent of salary for each year of service with full eligibility at age 60. The County of Sonoma, for example, uses a 3-percent-at-60 formula for most employees, resulting in pensions 33 percent bigger. The current SMART plan is 2 percent at 55.

<BL@199,12,11,10>Calculating pension on base salary, thus excluding specialty pay and unused vacation, sick time and administrative pay that can spike pension benefits.

<BL@199,12,11,10>Using the average of the final three years salary to compute pensions, further limiting the spiking that can occur in plans that use the single highest year.

<BL@199,12,11,10>Requiring employees and the agency to split, 50-50, the costs of annual contributions to CalPERS and all future increases in cost.

The equal-sharing provision is a key departure from most public pension plans in California. Typically, taxpayers bear the entire burden of investment risks, such as occurred with the sudden drop in pension portfolios that began in 2008. Those losses have been a key factor in the recent rising annual costs of local government pensions.

If approved by the SMART board at its meeting in San Rafael, the pension plan for new employees would take effect June 1.

It also includes a cost-of-living increase of up to 2 percent a year for retirees and a 2 percent match of an employee's contribution into a deferred salary plan.

"We are setting the rules going forward," Mansourian said. "Every time we hire someone, when we give them a letter of hiring, we will spell out all of these things. We have one chance to get this right."

For current SMART employees, the agency not only pays its share of annual contributions — 12.5 percent of salary — but also the workers' share, which is 7.5 percent of salary. The exceptions to the formula are Mansourian and Chief Financial Officer Erin McGrath, who pay their own contributions.

Mansourian on Friday bristled at the SMART critics who focus on his salary and pension.

As SMART's general manager, Mansourian receives a salary of $246,000. As a retiree from Marin County, where he was public works director, he receives an annual pension of $130,000.

"I worked for 31 years as a public servant, and I was promised a pension and I am receiving it," Mansourian said. "It has nothing to do with SMART."

You can reach Staff Writer Bob Norberg at 521-5206 or bob.norberg@pressdemocrat.com.