Mayor's Plan for Pension Reform Called Step in Right Direction | Politics

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Mayor's Plan for Pension Reform Called Step in Right Direction
Politics
Mayor's Plan for Pension Reform Called Step in Right Direction

JACKSONVILLE, Fla. -- Pension reform talks that have been underway since 2009 appear one step closer to reality today.

Jacksonville Mayor John Peyton this morning announced a plan to save $700 million in the city's pension plan over 35 years.

"This is a settlement agreement between the city of Jacksonville and the police and fire pension board," said Peyton.

Peyton said the settlement is not a part of the collective bargaining process. This budget year the fire union agreed to a cut in pay; the police union is still at an impasse.

The pension talks began in 2009 when Peyton told the unions pension reform was necessary in the face of declining city revenues and skyrocketing pension costs.

Police and firefighters in Jacksonville have a separate pension board to handle such discussions, chaired by Peter Sleiman, who joined Peyton today in announcing the plan.

"It was a hard process," said Sleiman, a trustee on the Fire and Police pension fund board."Everyone had to put aside their differences."

Sleiman said the fund has grown to $1 billion $130 million and it needs to stay sound for its members.

"What's important are two things: The sustainability of the pension fund for its members over the next 25 years and then also we had to recognize the economic sustainability for the city of Jacksonville to be able to fund the pension fund," he said.

Nelson Cuba, the president of the Fraternal Order of Police union, said the most important aspect of any proposal is that it does not affect current employees, only future employees.

"With this proposal, they have something concrete to look at ... so I think we're more than halfway across the finish line."

The plan needs to be attractive enough to stay competitive in this market and recruit the people needed for the jobs, said Cuba.

Randy Wyse, president, Jacksonville Association of Fire Fighters, said that today's proposal is a step in the right direction. 

"We have a lot of trust in our trustees, and if they feel this is where the pension fund needs to go for our future then that is something we have to take very serious," said Wyse.

But trustees have to buy into it, he said.

This could have been done two years ago, Wyse added. "But we had to force him, the mayor, to talk to the fund. If this ensures the future of the pension fund, I have to be in support."

Changes for police and fire employees include:

  • Employees must now work 25 years instead of 20 to retire
  • Employees will contribute more, 8 percent instead of 7 percent
  • Cost of living increases will be deferred for retirees for 24 months
  • The final average pay, on which benefits are established, will be determined by the last 60 months of service

The following changes affect the pensions of general employees:

  • Employees must be 60, not 55, to receive full benefits
  • Final average pay is based on the highest five years of service, up from the highest three years

"Jacksonville, like governments across the country, continues to struggle with balancing the need to meet rising employee and pension costs while grappling with declining revenue and increasing service demands," said Peyton. 

"As I have said many times, the key to managing our finances long term is pension reform."

The Police and Fire Pension Fund Special Committee on Pension Reform, the five-person board chaired by Sleiman, will vote on the plan May 18. If passed, the measure will get fast-tracked onto the city council's agenda for final approval.

The mayor, in announcing the pension reform settlement, avoided discussing the contract issues with the police union. He said this plan is for the future. He said the pension reforms will save the city nearly one billion dollars over the 35 years.

"What the road ahead holds will be really up to the next mayor and new council what further actions need to be taken," he said.

 

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