The Fire and Police Pension Fund Board voted unanimously to move forward with pension reforms that will save over $200 million over the next 25 years. Change became necessary after the stock market crash in 2008 caused the pension fund to lose a third of its assets.
After much research, the board determined that if everything stayed the same, the pension fund would not be available down the road. Mayor Andy Berke put together a Pension Task Force to work with the board to come up with a solution.
Before the vote, the board allowed some of the people who would be affected by the changes to have the floor to speak.
The reform plan was greeted with mixed reactions.
One man said, "At the beginning of this process, I felt like there were not any real issues with the pension. Six months ago, I was angry and I felt there was a conspiracy by the city not to fund our pension. Over the last six months, I've actually learned quite a bit about the pension."
He continued, "My opinion changed after looking at the hard evidence. We have an issue with our pension." He said he felt the changes recommended by the Task Force were reasonable changes.
Another man who had attended the task force meetings said, "I've learned during the process that we indeed have a problem that required immediate action before the issue became too big to address."
He said, "If this proposal will put our fund on solid ground and make our fund healthy, I'm for it."
Retired Officer John Frasier disagreed. He told the board he believed some of the changes were not legal. However, Attorney Bill Robinson said pension reform had taken place in many other states and had not been ruled against in any court.
The Board also gave a presentation detailing the changes. With the reforms, contributions from active employees toward the pension fund will gradually increase. The cost of living adjustment, or COLA, will drop from 3 percent to 1.5 percent. However, retirees will not see reductions in their current benefits; increases will just come slower.
There were also changes pertaining to retirement age. Currently, personnel can retire after 25 years of service. For those currently not vested, it will go to age 50 if there are 25 years of service, or to 28 years of service at any age. For new hires, it will go to age 55 plus 25 years of service or 30 years at any age. There will be no change for vested personnel.
The board said there are some improvements in the plan, including paying 100 percent of a salary instead of 60 percent of salary to families of those killed in the line of duty. There are also enhancements for certain categories of widows.
Board President Chris Willmore said, "Change is always hard and difficult." However, he said since 2008, 48 other states have changed their pension plans. He said this was not a "quick snap decision," saying they had been working on a solution since 2009.
He said, "I don't think we were intimidated. We were trying to fix a very difficult, complex problem."
Board member Mark Hoffman said, "This process has not been an easy process."
He said, "You may not like me today, but I think in 10 years from now when you're still getting your benefit check, I think you'll have a different outlook."