HUNTINGTON BEACH

The city is offering a group of its employees greater retirement benefits, and some worry that taxpayers may have to pick up the tab.

About 600 city personnel are “very close” to concluding a labor agreement that would allow them to retire at 55 and still earn the same percentage of income they now have to wait until they’re 60 to receive, said Bill Osness, the city’s personnel director.

Estimated to cost $450,000 annually, the benefit plan will be paid for by the state’s retirement system, said John Reekstin, director of administrative services. Known as the Public Employees Retirement System, the fund is flush with cash, due mainly to a booming stock market, he said.

As long as the economy doesn’t go “belly up,” the city won’t have to put up a dime for these added benefits, Reekstin said.

But Councilman Dave Sullivan wonders what will happen if the stock market bubble bursts. The retirement system could lose so much money, it may have to raise the rate of the contributions the city is obligated to pay into the fund, he said.