Fire Fighters vs City over control of pensions

Part 2: Pension fight smokescreen for control

By ED FINKELSTEIN

Publisher

St. Louis – The current fight between fire fighters and City Hall over reducing pension costs is little more than a smokescreen for the City’s real intent: “to take total control over the fire fighters’ pension plan and governing board,” charges Fire Fighters Local 73 President Chris Molitor.

“They already have total control because nothing that happens in Jefferson City can go into effect until the Board of Aldermen approves it. Then it could face a veto from the mayor, another part of the local control process.  And there have been plenty of times they have rejected proposals from Jefferson City,” he said.

Under the current arrangement for both the fire fighters and police officers, enabling legislation impacting both departments must first be approved by the state legislature. “This is designed to keep local politics out of these professional departments,” said Molitor.

To back up his argument that what the City really wants is total control of the fire fighters $400 million pension fund, Molitor makes several key points about the fire fighter’s efforts to reduce costs, efforts rebuffed by the Slay Administration:

FIRE FIGHTERS TRIED

• The City originally said they needed $7 million in savings. Local 73 devised a plan to save $6.6 million, which the City rejected. Then Board President Lewis Reed, seeking to find some common ground for a compromise, recommended additional changes for new hires which would bring the savings up to $7.6 million, a cost savings confirmed by an independent audit commissioned by the Fire Pension Board.

The fire fighters agreed to the additional changes. Again the offer was rejected by the City as “not enough” even though it exceeded their original demands.

• In an effort to provide some immediate savings to the City, last year the fire fighters introduced a cost-savings change to their disability plan. The change was designed to eliminate the possibilities of fire fighters receiving a disability pension and then going to work somewhere else, something Local 73 said was not right.

The bill’s changes would have initially saved the City $1.2 million starting last year in disability pensions with much more in the future. The enabling legislation, proposed by Local 73 to correct a situation that was being taken advantage of by a few fire fighters, passed the State Legislature and was sent to the City.

Alderman Joe Vaccaro (23^rd Ward) introduced a bill into the Board of Aldermen to put that disability savings plan into effect. However, Molitor said, “Under orders from Mayor Slay, the chairman of the Public Employees Committee, Alderman Craig Schmid (20^th Ward), held up the bill and would not let it be voted out.

“This disability pension change would have not only saved the City $1.2 million last year and more this year and in future years, it would prevent anyone from attempting to scam the retirement system,” Molitor said. The change would have offered re-training for another career to any fire fighter hurt on the job and truly could not do the work. If retraining was refused, the fire fighter would only get their normal pension, not the higher paying disability pension.

He pointed out that no one gets a disability pension until three doctors agree that the individual can no longer do the fire fighter’s work.

• Local 73 offered to make binding arbitration part of the review process and let an impartial arbitrator hear both sides then make an unbiased decision that would be binding on both sides. The City refused.

• After only four negotiating sessions between the City and Local 73, the city unilaterally cut off talks and declared an impasse. However, they never offered a “last and best final offer” for the union to consider, Molitor said.

MAYOR’S ‘CONTROL’ PLAN

The mayor’s total control plan includes:

• Putting a mayoral appointee (Director of Public Safety) in charge of the pension system, which puts it entirely under the mayor’s control;

• Eliminating cost-of-living for current retirees;

• Having fire fighters increase their payments into the fund to nine percent from the current eight percent;

• Eliminating the return of deferred contributions upon retirement to include all those working now who are counting on this as part of their overall retirement benefit since they do not get Social Security. (As noted last week article, under the current system, the interest alone on fire fighter’s contributions since 1984 was over $77 million totally; after the retirement reimbursements to fire fighters for the funds they contributed, almost $40 million in interest still remained in the pension fund. Interest in the fund from fire fighters contributions equals almost $2 for every $1 contributed);

• Prohibiting current fire fighters and new hires from retiring until age 55 (now they are eligible after 20 years of service with no minimum age);

• Eliminating some of the illness presumption laws that are in place that impact the retirement age. These presumptions are based on statistical data that shows fire fighters suffer from much higher rates of cancer, and lung and heart disease that the general population thus making retirement after 20 years a more reasonable approach that simply forcing a fire fighter to stay on duty till 55.

• A severe reduction in the amount of disability pay to a flat amount of salary; current it’s based on years of service.

• Prevent Fund trustees from suing the City for mismanagement.

“The mayor’s plan now before the Board of Aldermen would completely eliminate the current pension system and replace it with one that he would totally control,” Molitor stressed, adding, “We are surprised that a Democratic mayor is not supporting his fire fighters after they produced a plan to reduce pension costs. To us, this is nothing short of an anti-union, union busting maneuver…

“The members of Local 73 already have worked with the aldermen to develop reforms that address the pension issue. We have tried to work with Mayor Slay. And, while we are offering to make important changes, the mayor will not be satisfied until all the power to control the pension fund rests in his hands. The mayor’s plan is a recipe for corruption,” Molitor said, adding,

“No politician — no matter how popular, no matter how many times he has been elected — should be entrusted with that level of power. If we abandon the checks and balances that must remain in place, the potential for abuse will be enormous — today and long after Mayor Slay leaves City Hall.”

City plan in conflict with state enabling legislation

St. Louis- By only a one vote margin, 19-8 with 18 needed for passage, on April 16 the St. Louis Board of Aldermen took its first step towards withdrawing from the current fire fighters pension plan and seizing control of the entire plan from the Missouri State Legislature.

The next step has to be a second bill replacing the current plan.

This will bring into direct focus the real issue in this ongoing effort: total mayoral control of the pension plan by the City. Currently the State Legislature must first provide enabling legislation before the City can make or reject changes.

STATE PLAN

  Meanwhile, a bill authorizing changes in the pension system was voted out of a sate legislative committee on April 12. This bill would:

• Reduce retirement benefits for future firefighters by increasing the number of years on which their average final pay is calculated.

• Cap pensions at 70 percent of pay instead of 75.

• Cut the annual cost-of-living adjustments from 3 percent to 1 percent.

• Require the same nine percent annual contribution instead of eight percent as proposed in the mayor’s plan, but only refunding one-quarter of that upon retirement instead of all of it.

• Require new hires to work till they are 55 or have 30 years of service before being eligible for a full pension.

• Would not make cuts to current fire fighters’ benefits.

Stay tuned.