The City and Police and Fire Pension Fund both laid their cards on the table Tuesday when discussing pension reform for new employees and governance issues.
By the end of the afternoon session, there wasn’t a winning hand. No compromise was reached in the short time frame after both sides revealed their ideas of what was described as the easier portions of pension reform.
For new employees, the one hang-up is over the formula used to calculate — and as the city seeks — penalize employees who retire early. Under the city’s proposal, public safety employees can retire after 25 years instead of 30 years. Doing so, though, would trigger a 3 percent penalty per year.
For example, a public safety employee who works 25 years would accumulate 62.5 percent of his or her retirement benefits — 2.5 percent per year. The 3 percent penalty for five years would mean an additional 15 percent stripped, meaning the final payout would be 47.5 percent of that employee's pension.
John Keane, fund administrator, disagreed with the idea, saying employees who retired early already would be penalized because they’d be recouping less. In addition, penalizing 3 percent a year in those five years when employees can only accrue 2.5 percent each year didn’t make sense, he said.
Chris Hand, Mayor Alvin Brown’s chief of staff, said the formula sets a policy goal that takes into account concerns of public safety officials regarding retention and not encouraging early retirement.
It was the main disagreement on the topic between the two sides, both both said they would further review the issue.
Further apart was a governance issue that has been a point of contention for several years: who appoints the fifth and final board member to the pension fund board.
The board comprises five members, one elected from both the police and fire unions and two others who are appointed by the mayor and City Council. The fifth is appointed by those four members.
The city in its proposal says the mayor should select and council should confirm that final person. Keane said the law should stay the way it is.
After Tuesday’s afternoon meeting, Keane said he doesn’t see any give on his side about the issue. Brown was more optimistic on the issue, saying there should be "give and take" on both sides
They’ll come back to the table Thursday to resume talks and, if necessary, several times next week.