Pension group tosses ideas, keeps others
Instead of identifying what would work, the Jacksonville Retirement Reform Task Force spent hours Thursday eliminating what won't help solve the city's pension issues.
A strict defined contribution plan, where employees bear all the risk and are similar to private sector 401(k) plans, is out.
So is the idea of giving real estate assets to the Police and Fire Pension Fund as a one-time contribution to lower the unfunded liability.
Using pension obligation bonds was shot down as part of any solution.
Instead, the 17-member task force decided to keep a version of a defined benefit plan as well as two hybrid models that combined elements of both a traditional pension and 401(k) plan.
Cost-of-living adjustments also are likely to be reduced.
Potential revenue sources to pay down unfunded liability could still come from a millage increase or proceeds from selling city-owned real estate, the group decided.
"I think there is still a lot of confusion, but I think we made a lot progress," said Bill Scheu, chairman of the task force.
Pew Charitable Trusts, which is assisting the group, will take the remaining options and analyze them before the task force's meeting in January, said David Draine, Pew senior associate.
After that, there will be a benefit analysis and a range of investment scenarios that could include costs to help the group make decisions.
"They're in the driver's seat," Draine said of the task force. "They're going to tell us where they want to go and we're going to give them a map to get there."
The group's recommendation could end up being a mixture of the remaining options, but Scheu said during the meeting that current employees would be affected.
How and at what pace the unfunded liability is paid down also will be part of Pew's work and that of a subcommittee that will meet in the coming weeks.
Police and fire union representatives were in attendance, as was John Keane, the pension fund administrator.
Keane later said that the task force's efforts are "a work in progress" but that pension reform has been a top priority for the fund, as is ensuring that public safety employees have the safety net they need — something the hybrid plans sometimes don't offer.
"It has to provide protection for people," he said.
A report about governance discussed an option of adding an investment advisory committee, a group of volunteers who could advise on financial and investment strategy. Keane said if that offered comfort to City Council and others, having a three-person group is an idea that could be explored.
Keane will meet Monday with Scheu to further discuss points from the recent reports given to the task force.