The Watertown Local Development Corp. is forging ahead with setting up pension and other benefits for its two employees, amid the fallout of a state ruling that they and similar workers are not part of the state retirement system.

On Friday, the WLDC, also known as the Watertown Trust, discussed a restructuring plan that must be in place by July 31. By then, the Watertown Trust must sever ties with the Jefferson County Industrial Development Agency and become its own entity. It will continue to work on economic development and job growth in the city.

“We’ll be able to have the same relationship we’ve had and do what we’ve been doing,” CEO Donald C. Alexander of the industrial development agency said after the meeting.

At a special board meeting Friday, the WLDC board agreed on a health and benefits package and a payroll system that will be put in place for its two employees, CEO Donald Rutherford and executive assistant Kim Taylor. But they will have to resign from the agency and become employees of the new version of the WLDC, board members said.

It will take a little longer to arrange for a pension plan for the two employees. As of the end of the month, they and 10 other employees of five other area local development corporations affiliated with the industrial development agency will be taken off the state’s pension plan.

The employees were put in retirement-fund limbo when state Comptroller Thomas P. DiNapoli concluded in February that they should not have received pension credits in the years they had worked for sub-agencies of the industrial development agency. As a result of the state Legislature’s recent passage of a pension restoration bill for the 12 workers, the WLDC has an Aug. 1 deadline to get those issues resolved.

The dispute revolved around whether the employees worked directly for JCIDA or nonprofit organizations called local development corporations.

A three-member ad-hoc committee — made up of Trust board members Erika F. Flint, Jeffrey T. Fallon and Mark S. Bellinger — arranged for the Rochester-based Paychex to handle the payroll, workers’ compensation and disability, while the two Trust employees will receive the same health benefits package.

The 10 other employees work for the Jefferson County Agricultural Development Corp., Jefferson County Job Development Corp., Carthage Industrial Development Corp. and Watertown Industrial Center Local Development Corp.

The other LDCs will have to deal with the same retirement, health benefits and payroll issues. The WICLDC is meeting Wednesday to discuss a new arrangement for its employees. The other groups will also soon meet about those issues.

Under the legislation, all 12 employees will be able to collect on their accrued state retirement benefits through the end of July.

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