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Pension fund director open to"shared sacrifice" by discussing reduced benefits for current members

Posted: May 12, 2014 - 9:19am  |  Updated: May 12, 2014 - 12:29pm
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Mayor Alvin Brown's Chief of Staff Chris Hand answers a question about unfunded liability during Monday morning's meeting. Representatives of The City of Jacksonville and the Police and Fire Pension fund appeared to move forward during negotiations at City Hall Monday morning, May 12, 2014 with more talks scheduled for Tuesday. (The Florida Times-Union/Bob Self)
Mayor Alvin Brown's Chief of Staff Chris Hand answers a question about unfunded liability during Monday morning's meeting. Representatives of The City of Jacksonville and the Police and Fire Pension fund appeared to move forward during negotiations at City Hall Monday morning, May 12, 2014 with more talks scheduled for Tuesday. (The Florida Times-Union/Bob Self)

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The executive director of the Jacksonville Police and Fire Pension Fund said Monday the fund is open to discussing reductions in pension benefits for current police and firefighters as part of comprehensive pension reform.

John Keane, who is representing the fund in talks with Mayor Alvin Brown, said he would be willing to discuss Brown’s proposal for lowering the 3 percent cost of living adjustment (COLA) for pensions.

Keane also said he is open to discussing changes in the 8.4 percent interest earnings guaranteed on Deferred Retirement Option Program accounts.

Keane said after the Monday morning session that while the fund will consider Brown’s proposals, the fund hasn’t agreed to any reduction in pension benefits for current police and firefighters.

“We’re open to discussing them, but that doesn’t mean we’re going to agree to them,” Keane said.

The Police and Fire Pension Fund and Brown agreed last year to reduce pension benefits for new hires, but City Council rejected that deal, saying it didn’t go far enough.

To go beyond last year’s deal, Brown is seeking to secure changes in pension benefits for current police and firefighters.

A high-profile pension reform task force issued a report in March calling for a “shared sacrifice” approach that reduces pension benefits for current workers and also raises taxes to accelerate the city’s paydown of its $1.65 billion debt to the pension fund for future pension obligations.

The task force recommended the city pay about $200 million a year for the next 14 years. This year, the city contributed $144 million to the pension fund and that is slated to rise to $153 million next year to meet the minimum contribution required by state law.

Brown says he would agree to the $200 million a year funding level if the pension fund signs off on other proposals, including benefit cuts for current employees. But the extra money would be depend on City Council members putting it in the budget, so it is uncertain that council members would actually do so.

Chris Hand, chief of staff for the mayor, said part of Brown’s proposal calls for the pension fund to earmark an extra $4 million toward paying down the unfunded liability by using state tax dollars the fund receives for enhanced pension benefits. Hand said if the city didn’t make its extra contribution in any given year, the fund likewise wouldn’t have to make its $4 million payment that year.

“We’re not looking for any escape hatches,” Keane countered.

He said locking down the city’s funding level would be critical because there are other places where lawmakers said they would put in additional money as part of a package deal with benefit cuts, but lawmakers then balked at fulfilling their funding commitment.

Keane, Brown and representatives of the mayor’s office met for about two hours Monday and will return for a full day of talks Tuesday.

Though Keane has been the only representative of the fund at the table during the talks, he is giving briefings to board members about the discussions. He and board Chairman Walt Bussells said the briefings are informational. Any feedback by the board would be done in public at board meetings, they said.

Bussells said the board already set the parameters of what it wants to achieve by having board workshops over the past year, as well as meetings to discuss various lawsuits affecting the pension fund.

The board did not vote on the various recommendations in the pension reform task force’s report, which has been the starting point for discussions between Keane and Brown.

Bussells said those issues were covered, however, in the board’s detailed discussions of “dozens of elements” of comprehensive pension reform.

“We’ve discussed all the issues that we’re aware of and seen where the majority of the board was and what the best ideas were from each of us,” Bussells said of board workshops and meetings the past year. “We’ve provided a pretty discrete framework within which John [Keane] is working diligently to seek comprehensive pension reform.”

He said Keane “has a very good sense of where there’s unanimity among the board,” and in cases where board members had disagreements over particular issues, Keane knows where a majority of board members came down in their positions.

Bussells said it wouldn’t be appropriate for board members to be at the table during the discussions.

“I don’t think policy-makers ought to be involved with staff work, or vice versa,” he said. “John does not set policy. He works within policy parameters. The board ought not try to be staff. That just creates inefficiency and dysfunction.”

He said Keane has flexibility to work within the board’s parameters “if it produces a total result which is acceptable to everyone.”

Bussells said he’s pleased with the pace of the discussions.

“Everyone is speaking directly, unambiguously and candidly,” he said. “That’s excellent. That’s what is required.”

Brown is expected to give his response Tuesday on whether he will withdraw his proposal for the mayor to appoint the fifth member of the Police and Fire Pension Fund’s board of trustees.

One board member is elected by police, another by firefighters, and City Council appoints two board members. Those four board members jointly select the fifth member.

The pension reform task force recommended giving Brown power to appoint that fifth member, but the Police and Fire Pension Fund staunchly opposes that change, saying state law dictates the selection process for such boards across the state.

Former state Sen. Rod Smith, who is moderating the talks, asked Brown last week if he would withdraw the proposal for appointment power in order to clear the way for agreement on other proposed changes in governance of the pension fund.

City Council President Bill Gulliford said in an interview Monday that it doesn’t appear the pension fund is going to relent so it’s not productive to keep trying to force that change.

“I’d much rather see them show a willingness on other issues such as the current employees make some concessions,” Gulliford said.

David Bauerlein: (904) 359-4581

Comments (4)

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jagwater 05/13/14 - 07:07 am


Shared sacrifice=redistribution of wealth

Max mutt
Max mutt 05/13/14 - 12:42 am
Premium Member

Maybe Keane could contribute

Maybe Keane could contribute some of his multimillion dollar retirement package to offset some pain.
Well, "shared sacrifice" usually means for the other guy.

johnctaughtme 05/12/14 - 08:52 pm
Premium Member

Apparently, some journalists

Apparently, some journalists and editors get paid for essentially being able to write the same thing numerous different ways at numerous times.

I cannot imagine how small the Times-Union will be when this issue is resolved, but of course it appears that many do not want it resolved quickly, as it serves so many agendas so well.

I am reminded of a college professor in a communications class, who noted that when something so intensely and completely dominates a newspaper or other media outlet for so long, one should begin to wonder what other real stories are not being adequately reported, either intentionally or unintentionally. The possible answers to that may explain some of the other issues and problems in Jacksonville.

What a shame, when some of us can remember both the Times-Union and the Jacksonville Journal coming to the house every day, without this endless repetition of the same story and editorial line multiple times a day.

Lie Detector
Lie Detector 05/12/14 - 04:27 pm

Shared sacrifice = No raises

Shared sacrifice = No raises for over six years, 3% pay cut during the same time period and no raises in sight for the near future. Alvin and the city won't be happy until they bleed current employees dry. Leave current employees alone.

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