Firefighters Retirement System
4:35 pm
Tue January 25, 2011

Aldermen slow down bill on funding firefighter pensions

There’s been a temporary delay in a new skirmish between the city and its fire department.

Ald. Matt Villa has held a bill that aims to change the way certain benefits for firefighters are funded.

This particular skirmish goes back to last year, when the city approved a pay plan for firefighters that eliminated their ability to accumulate sick leave, which can boost pension payments at retirement. They can still receive the additional benefits for days they’ve already built up.

The Firefighters Retirement System (the fancy name for the pension fund) sued, saying the city can’t change benefits for current employees – only future ones.

The city says in the course of that lawsuit, it discovered that it’s been paying too much into the firefighter’s pensions for the last 10 years because an actuary is improperly including that sick-leave buyback when the city’s contribution is calculated.

(The city has a chance to review and challenge the calculation made by the system’s actuary, but the budget director says there’s no way to tell from the standard documentation submitted how much of the total projected cost of benefits comes from one specific perk like sick-leave buyback).

The city says both city and state law require the money to come from another fund within the pension system – the Future Benefits Fund. So it’s countersued to get the money back – and the mayor’s office is pushing for additional legislation that would require the pensions system’s actuary to certify that sick leave buyback isn’t included in the calculation for the city’s share. If that doesn’t happen, the city can refuse to make the payment into the pension for that year.

It’s estimated that including the sick-leave buyback in the calculations has cost the city about $1 million a year for the last 10 years. The city no longer has an ongoing obligation to provide revenue to the Future Benefits Fund.  The budget – especially when it comes to the firefighters – has been a huge flash point this year.

That fact, combined with the fact that it’s technically already illegal for the sick-leave buyback payments to be included in the calculation of the city’s share, has the firefighters crying foul.

That second fund – the Future Benefits Fund – is used to help give widows and children of fallen firefighters a cost-of-living adjustment when there’s money available, says IAFF Local 73 president Chris Molitor. Should the sick leave benefit be drawn from that fund, it would be exhausted in about five years. He also says he didn’t hear about the legislation until late last night.

"It’s another attack on the brave men and women who put their lives on the line to keep the city safe," he says.

"It’s not retaliatory,” says the mayor’s special assistant Stephen Gregali, a union official himself and a former alderman who one chaired the committee hearing the bill. "What it is, it’s assuring the actuary performs their analysis per the requirements in the statute. " But he didn’t say why the current statute couldn’t just be enforced.

The measure is only a short-term budget fix, anyway. Firefighters are entitled to receive extra compensation for the sick leave they’ve already accumulated, which means the city would have to replenish the Future Benefits Fund to make sure it can meet its pension obligations, or risk additional litigation.

Matt Villa, the committee chairman and the bill’s sponsor, decided to hold the bill to allow negotiations between the city and the firefighters to continue.