In the dance of pension talks, Wednesday marked the last song.
Both Mayor Alvin Brown and the Police and Fire Pension Fund administrator were on the floor, but dancing different styles — and it was noticeable.
“Some of you are dancing the foxtrot, some of you are doing the quickstep,” said Rod Smith, the former state senator serving as moderator for the discussions. “Now we need to be dancing the same dance here and we’re not. We’re dancing right by
Less than two hours later, both sides were in unison despite some stepped on toes.
Brown and Keane struck a deal on pension reform Wednesday after coming to agreements on the last few contentious items.
For current employees, it was cost-of-living adjustments and return rates for those entering the Deferred Retirement Option Program.
Overall, it was the how and how much the city and fund would pay down the more than $1.6 billion worth of unfunded liability in the plan.
Keane wasn’t willing to budge on COLA adjustments. The city gained a new DROP scale, despite the floor not being as low as it sought. And in the end, the fund will contribute $107 million over the next several years as the city puts in an additional $40 million annually to combat unfunded liability. That includes an immediate hit of $61 million the fund will provide the city from reserve accounts.
“I’m not giving up anymore,” Keane said during the final break.
On the unfunded liability front, the city also offered a “confidence building” idea to try and alleviate fund concerns about nonpayment. Each year a standing committee of the City Council auditor, chief financial officer, chairman of the Jacksonville Retirement Reform Task Force and others will meet to find ways of securing the city’s $40 million commitment.
As an added deterrent, should the city not make that commitment, it will have to pay the fund’s share for that year.
Keane regularly referenced the pension woes of New Jersey when it came to trust issues. On Tuesday, its governor diverted promised pension payments to instead cover budget shortfalls.
Old issues that were resolved, such as new employees and governance changes, remained resolved — there was no going back for tweaks, or as Smith commonly referred to it, “unwinding the ball of twine.”
Not unwound was that current employees will ultimately pay 10 percent of their paychecks toward their retirement, which also was agreed to in earlier meetings.
Contributions and benefits for new employees largely mirror what the sides agreed on last year.
And on governance, major changes include the addition of an investment advisory board to the fund and new language about the qualifications of city-appointed board members and the fund’s next administrator.
One major issue that isn’t changing is how the fund board’s fifth member will be selected.
Brown sought the ability for mayors to make that choice, while Keane was steadfast in calling it a nonstarter.
Other changes include the fund receiving a “share plan” Keane sought and additional investment power, minus the use of hedge funds.
The share plan would end up providing extra benefits to employees once the unfunded liability is paid down.
The final arrangement doesn’t meet all of the goals set by Brown’s retirement reform task force, but he called it a “significant accomplishment” and one that represented “shared sacrifice.”
He said the changes in governance, the DROP scale and contributions current employees will make are significant.
On the other side, Keane said no changes to COLA and ensuring the city keeps its side of the bargain on paying unfunded liabilities were wins.
The city will run numbers over the next several days to determine how much the deal saves in the upcoming budget.
But, Brown said, the deal will save taxpayers $1.5 billion over 30 years, up from the $1.2 billion his deal last year would have saved.
That was rejected by council, which also will see this deal as soon as next week for review and, ultimately, a vote should the pension board sign off on the deal, too.