Thu February 9, 2012
Slay proposes drastic changes to city firefighter pensions
Updated at 12:20 p.m. with comments from the firefighters union.
Updated at 3:55 p.m. with timeframe, and more comments from Mayor Slay and the union.
Saying the current system is financially unsustainable and could result in huge reductions to city services, Mayor Francis Slay has officially unveiled his plan to change pensions for the St. Louis city firefighters.
Under the measures, which will be formally introduced at the Board of Aldermen tomorrow, the city would regain control over the level of benefits for firefighters, which is currently set by state law.
"All active firefighters will keep all benefits they have accrued in the State-controlled system," Slay emphasized in a blog post outlining his proposal. But new hires - those who join after May 31, 2012- will face some major changes.
- All firefighters would have to pay more into the system (9 percent as opposed to 8 percent). New hires would not get any money back, and current employees would not get back any contributions made after the new start date.
- Firefighters could not start drawing a full pension until the age of 55, and could not receive their pension while continuing to work, an option known as deferred retirement. A firefighter who started drawing his or her pension before age 55 would have it actuarially reduced. Currently firefighters can retire with a full pension after 20 years of service.
- A firefighter who is too disabled to work will continue to receive full benefits. But the pension would be reduced if a firefighter is able to work at another profession.
"The cost of [the Firefighters Retirement system] has risen from $6 million per year to an expected $31 million next year. That will take it from 12 percent of the Fire Department budget to more than 30 percent," Slay said in his post. "Neither the taxpayers, nor the City, nor the Fire Department can continue to absorb these huge cost increases. If something isn’t done, the cost will go up by at least another $7 million next year. That will result in catastrophic cuts in the Fire Department and other City services."
In the post, Slay says his office has negotiated with Local 73 of the International Association of Firefighters, the department's union. But he says the theirrefusal to recognize the city's authority to control the level of benefits locally has led to an impasse. The city has hired outside counsel to make their legal arguments, according to aldermen who were briefed.
Reaction from the union was swift and angry.
"Mayor Slay has certainly turned his back on the brave men and women of the St. Louis Fire Department by trying to take this action," said president Chris Molitor. "He's trying to eliminate the checks and balances that make us feel more secure about our retirement. Would you trust the mayor of a city with your retirement plan?"
Molitor says the union believes the measure is illegal, and will lobby hard against it. Passage, he says will lead to a lawsuit. The measure needs 15 votes to pass the Board of Aldermen, which has just six meetings currently scheduled this session, though more could be added if necessary. Slay says he's confident he has the votes and the Board will complete its work in time.
Firefighters Retirement System