Most of the elements of pension reform appear to have the blessing of the Police and Fire Pension Fund board.
It’s those “most complex and interesting elements,” as board Chair Walt Bussells calls them, which could end up requiring changes to get through.
The board met for about three hours Monday to take up a “candid, blunt” discussion about the deal agreed upon by Mayor Alvin Brown and fund administrator John Keane, then later tweaked by City Council. It was the first chance the five-member board had to fully discuss the deal after council passed it this month.
“We’re making progress,” Keane said late Monday.
Bussells said preliminary votes showed unanimous approval for the majority of the reform package, including creating a fund investment advisory committee, expanding investment class and reaffirming disclosure procedures.
As for the interest rates that were changed on the Deferred Retirement Option Plan and cost-of-living adjustments for current retirees, they’ll be more difficult. So, too, will the nature of the relationship moving forward — allowing council to impose benefits in the event of impasse over the 10-year term of the deal.
Council approved changes to all three before sending it back to the board. For DROP, a guaranteed investment floor was taken away, while the cost-of-living adjustments were tweaked to reflect Social Security movement.
Bussells said as an individual board member, he favors indexed rates as opposed to fixed rates on such plans, but other trustees had different viewpoints. Those three points of reform will be hashed out during a Jan. 5 workshop, 10 days before the fund’s deadline on the reform package.
If the board members don’t see eye-to-eye enough to receive the needed three votes on any particular point, Bussells said it would then be on to the next step.
“I’m reasonably confident the majority will be able to suggest an alternative,” he said.
That would mean those changes, once approved, would head back to council for another round of approvals.
One item that could possibly come into play: Bussells said the board was told its reserves have close to $80 million in them, more than the $61 million or so it anticipated. The $61 million is slated to head to the city as part of a reform deal to pay down the more than $1.65 billion in the plan’s unfunded liability.
Other than that, no funding has been identified. There have been talks about a partnership with JEA that has the utility and city both borrowing $120 million and applying that plus the pension fund reserves to quickly pay down that outstanding figure.
If it came to fruition, it would still need the JEA board and council approval before any overall pension reform is implemented.
(904) 356-2466