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Friday, February 10, 2012

Slay Offers St. Louis Firefighters a Pension Plan With Major Cuts for New ires

BY DAVID HUNN • > 314-436-2239 | Posted: Thursday, February 9, 2012 12:45 am
ST. LOUIS • New city firefighters would earn a pension stripped of some current benefits deemed "unaffordable," according to two bills championed by Mayor Francis Slay and to be introduced Friday to the Board of Aldermen.
The bills, ready after months of preparation and debate, would essentially close the current Firemen's Retirement System of St. Louis, which is partly controlled by state law, and start a new, city-governed fire pension plan.
The bills, if passed, will not change benefits already earned by the city's 600 firefighters, according to copies obtained by the Post-Dispatch. They also would retain for new hires the maximum basic retirement — 75 percent of their pay per year, for life.
But Slay's proposal would reduce retirement earnings for nearly all firefighters going forward — and most drastically for new firefighters. New hires would have to wait until 55 to retire with a full pension. (There is no minimum age now; firefighters can retire after 20 years of service.)
In addition, new firefighters would get fewer cost-of-living increases and no more deferred retirement options — which pay firefighters their pensions while they continue to work.
Moreover, all firefighters would have to pay more into the system. And new firefighters would no longer get that money back. Current firefighters would not get back money they put into the system in the future.
And disability pensions, which both city leaders and firefighters agree have been abused, could get slimmed to just 25 percent of a firefighter's salary, depending on the injury. (Now, firefighters disabled on the job get 75 percent of the maximum salary for their position.)
The bills lay out Slay's legal and moral argument for reform of the system.
And they outline the financial strain it puts on the city, saying that city payments into the fire pension system have gone up nearly 600 percent, to $23 million in 2010 from $3.4 million in 2001, and now "consume nearly a third of the fire department's budget."
All three of the city's retirement systems — for firefighters, police officers and civil service employees — are under scrutiny now.
"This is a critical juncture for the city," said Slay's chief of staff, Jeff Rainford, who has been meeting with aldermen for months on the subject. "In a lot of ways, the city is a better place than it was. Tax revenue is going up. Crime is going down. We've gotten our financial house in order in every way — except for pension costs."
The city is focusing on firefighters' pensions first, Rainford said, as the most expensive per worker.
Rainford acknowledges that the bills won't be easy to pass. The mayor will need the support of at least 15 of the city's 28 aldermen. Some have already vowed to fight him.
In addition, the proposal, if passed, will likely face court challenges from the pension board, called the Firemen's Retirement System of St. Louis.
Executive Director Vicky Grass declined to comment on the bills' details. But the system's private attorney, Dan Tobben, said Wednesday that the mayor wasn't going about reform correctly.
"The fact that they're 'opting out' and setting up a different pension program seems clearly to be against state law," he said.
Moreover, he said, courts across the country have ruled that cities can't change benefits for existing workers, only new hires.
Using similar arguments, the system sued the city more than a year ago after it stopped allowing workers to accumulate sick leave days. The case is still in court.
Some aldermen buy Tobben's argument.
"Haven't we tried this before, been sued and lost?" said Alderman Joe Vaccaro, D-23rd Ward, who introduced a bill last year to reduce disability costs and retrain injured firefighters. He had support of the firefighters union and the state legislature, before the mayor squashed the effort, saying it didn't go far enough.
Still, the mayor has already lined up supporters. Alderman Craig Schmid, D-20th Ward, will sponsor the bill, and, as chairman of the board's public employees committee, is likely to be its first shepherd through the city's legislative process. He said his aim is a "realistic, sustainable" pension system.
The bills outline the mechanisms the city plans to use to sidestep the concerns of Tobben and others.
The first bill would repeal 33 city laws and discontinue the accrual of benefits under the old system, effective June 1. It says the system has "transformed" from its origins and is now "unsustainable" with "unaffordable secondary benefits, which must be funded by City taxpayers but over which the City has no influence or control."
The second bill would establish the new system, merge it with the assets and liabilities of the old one, and dramatically change benefits for new hires.
It would eliminate the popular Deferred Retirement Option Plan, which aims to keep top brass for five years longer by paying them a pension and a salary at the same time.
Slay said he hoped to reach agreement with the union, the International Association of Fire Fighters Local 73, but on Monday his office sent it a letter of impasse.
Chris Molitor, president of the union, said the city never gave him a final offer to take to his members.
"That violates every proper protocol that's involved in negotiations," he said. "It is further proof that the mayor had no true desire to reach a compromise with firefighters."
Moreover, he said, the union has a plan to save about $6.6 million next year and for the next several years, which it will disclose soon.
Fire Chief Dennis Jenkerson said that he hadn't seen the bills' details but that he was concerned they could lead to a glut in retirements this year. "I think you always worry about wholesale retirements with upper management," he said.
Aldermen will need at least three meetings to pass the bills and have only about six left before the session ends.

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