by Bradley Parsons
Staff Writer
Police and Fire Pension Fund administrators and the mayor’s office have reached an agreement, which both sides say will provide retirees with more affordable health care at no expense to taxpayers.
The $1.7 million annual benefit will be financed from a pension fund reserve account. Fund administrator John Keane had sought partial payment from the City, but the mayor’s office refused. Instead, Mayor John Peyton offered his support for the current proposal as it works its way through the City Council. The process will begin today when the Council’s Finance Committee considers the agreement.
“We were asking the City to provide the funds, but we found the administration wasn’t interested in committing additional general fund dollars,” said Keane. “Sometimes you don’t get the best of what you want, so you just suck it up and keep going. We think this solution is equitable to our members as well as the City.”
Keane said the proposal was identical to a health care benefit for the City’s General Pension Fund that was approved unanimously by the Council. He told Peyton in a letter that he would not “seek any further benefit enhancements that would require General Fund dollars during the balance of your first term.”
Mayor’s office spokesperson Heather Murphy said Peyton endorsed the agreement as a necessary measure to offset health care costs. Operating under the constraints of a tight budget, Murphy said “it wouldn’t be fair” to pay a new benefit with taxpayer money.
A wave of January retirements and escalating health care prices infused negotiations with a sense of urgency, said Keane. The police and fire departments will lose about 270 employees this year to an early retirement plan. The 133 projected fire department retirements is 49 more than the previous four years combined.
Also growing is the cost of health care. Keane said the pension plan’s health insurance premium climbed this year to an unprecedented annual cost of $2,400. The benefit would pay a maximum annual benefit of $1,800 ($150 monthly) to retirees with 30 or more years of service.
With more retirees facing higher medical bills, Keane said the health care benefit became a necessity.
“We have a lot of people under a lot of stress,” said Keane. “I’m real happy to see this thing moving.
“With 100–plus people leaving and the drastic increase in costs they’re facing, our members are enthusiastic to get some help.”
Peyton told Keane in a letter that he would advocate the benefit to the Finance Committee today and would seek “prompt enactment’ by the Council.
Keane said the reserve account that would pay the benefit currently holds about $2 million. State tax funds will replenish the account annually, he said.