Police, Fire: 'Don't Cut Our Benefits'

Dozens of protestors picketed outside City Hall before the meeting, carrying signs that said “Protect Our Pension” and “Don’t Cut Our Benefits.”

During nearly a year and a half of discussions, both city staff and Police and Fire employees have come to agree on one thing: The plan is woefully underfunded.

The fund has 52 percent of the money needed to fund all of its current liabilities, according to Assistant City Manager Evelyn Honea. Honea, who also serves as chair of the plan’s pension board, said a healthy plan would have between 70 percent and 80 percent funding.

The disagreement comes in how to fix the $2.8 million shortfall.

The city says there are three areas that need to be addressed: city contribution levels to the fund, the fund’s return on investment, and benefits. Honea told council that the city is addressing all three.

“The board is currently in the process of implementing the recommendations of a consultant with the goal of improving our return on investments,” she said. “In the area of increased contributions, we’ll be discussing that in your budget workshops in coming weeks. Third is the benefits, and that’s what’s before you.”

The city already has taken some action on the investment issue; the Springfield Police Officers’ and Firefighters’ Pension Plan Board of Trustees, which directly oversees pension fund investments, was recently increased from 9 to 11 members, with the city manager’s designee – currently Honea – serving as board chair.

That change came after the city and Police reached a compromise in May 2005 to cap accumulated holiday pay. The agreement reduced the fund shortfall from $3.5 million to the current $2.8 million.

The proposed benefits changes, which would be effective only for those hired to the Police and Fire departments on or after June 1, include a minimum retirement age of 55 with 25 years of service and a 2.5 multiplier for pension payouts, compared to a 2.8 multiplier for current employers.

New employees also would contribute 8.5 percent of their pay to the plan – a smaller portion than the 11.35 percent paid by current employees – but that money would not be refunded on retirement.

Eight people at the meeting spoke against the recommendations.

Shawn Martin, a member of the International Association of Fire Fighters Local 152, said the recommendations cut benefits for new employees without addressing the real problem: inadequate city contributions to the plan.

“This ordinance is not set up to fix the problem,” Martin told council. “You have been given a Band-Aid to fix what is effectively a gunshot wound.”

Other speakers, such as retired Police Officer Tony Glenn, said the changes would make it difficult to recruit and retain new Police and Fire employees, making the departments “training grounds for other agencies.”

Honea said the amendments to benefits are necessary in addition to the investment and contribution changes.

“The benefits of current employees are simply not sustainable under the current plan,” Honea said. “Without making changes for future employees, the plan will not be able to continue in future years without substantial cuts in public services along with reductions in personnel.”

Council members were noticeably silent on the issue, listening quietly to the speakers without asking questions of them.

“We appreciate you all coming here this evening and making your comments, and the council will consider carefully your points,” Mayor Tom Carlson said following the public comment period.

Council can vote on the proposal at its May 15 meeting.

Benefits Package

If City Council approves the proposed changes to the Police Officers’ and Firefighters’ Pension Plan, here’s how the benefits would stack up for new and current employees:

Contribution to the pension plan

Current employees: 11.35 percent, refundable

New hires: 8.5 percent, nonrefundable

How long would employees have to work to get maximum pension payments?

Current employees: 25 years

New hires: 30 years

Minimum retirement age and experience

Current employees: No age minimum; 25 years’ service

New hires: Age 55 with 25 years’

service

When does early retirement penalty stop?

Current employees: After 20 years

New hires: After 25 years

Cost of living allowances?

Current employees: 3 percent, starting at age 56

New hires: None[[In-content Ad]]