The Jacksonville Retirement Reform Task Force made the conclusions Wednesday, picking a traditional defined benefit design over a hybrid plan, which mixes elements of such a pension plan with a typical 401(k) design often found in the private sector.
Saddling current employees with more of the burden might not work at the negotiating table, according to Police and Fire Pension Fund administrator John Keane.
But, count public safety officials as those likely in favor of the move.
Sheriff John Rutherford and Fire Chief Martin Senterfitt told the group in separate presentations Wednesday of the need for “clarity” and “stability” for such a plan to ease uncertainty that has affected recruitment and retention efforts the past several years.
“The last thing I want is something that makes it portable,” Rutherford said, referencing pension designs that better allow employee movement. “I don’t want my guys going anywhere. … I want them staying around 25 years to get that pension.”
Both talked of losing employees to surrounding counties and other states after spending taxpayer dollars to train them. By doing so, it creates a more inexperienced force, Senterfitt said, which is a public safety issue.
An agreement between the unions and Brown’s administration struck last year kept the traditional plan but changed the benefits and contributions of only new employees.
A court ruling in December said that deal violated state Sunshine Law by not being negotiated in open meetings.
Brown last month pitched a new proposal that mostly kept parameters of his old plan in place, but sought more from current employees.
The task force Wednesday signed off on several of those changes, such as:
• Increasing current employee contributions immediately from 7 percent to 8 percent and then to 10 percent after pay raises make up past cuts.
•?Changing the Deferred Retirement Option Plan by eliminating the 8.4 percent guaranteed rate of return and replacing it with actual returns. The plan allows those entering retirement to put off retirement benefits in exchange for a lump sum payment later.
• Dropping the cost-of-living adjustments for from 3 percent to 1.5 percent a year.
It’s those additions that might be an issue.
Keane said there is still “a long way to go” and saw problems with the recommendations seeking more from the current employees. The cost-of-living adjustments the group approved were one example where he didn’t see eye-to-eye.
“We’re not going to agree to anything like that,” he said.
All of the recommendations the task force decide upon will be given to the mayor, council president and the police and fire pension fund. From there, it will be up to collective bargaining to determine the plan. The task force’s work is just recommendations.
One of the largest remaining points of those recommendations could be decided next week.
Funding of the $1.7 billion worth of unfunded liability is still unresolved, but the task force wants to apply anywhere between $190 million-$210 million worth of additional payments annually to chip away at the problem.
Options include recommending a property tax increase, instituting a new sales tax for fire and rescue services and buildings, selling city-owned real estate, a bump in the JEA franchise fee or $40 million of increased contributions from the utility. The latter option is currently being reviewed by JEA.
Six months of work later, a retirement reform task force has concluded the pension design in place is best for the city — but also decided current employees should be included in the changes.