Newspaper article The Florida Times Union

Pension Talks: Both Sides Offer Ideas; Benefits for Current Police, Firefighters Still Unsettled

Newspaper article The Florida Times Union

Pension Talks: Both Sides Offer Ideas; Benefits for Current Police, Firefighters Still Unsettled

Article excerpt

Byline: David Bauerlein

A flurry of pension reform proposals hit the table Wednesday in talks between Mayor Alvin Brown and the Police and Fire Pension Fund, but the fresh offers didn't produce a breakthrough on benefits for current police and firefighters.

Both sides will return Thursday afternoon for another round of talks that will be crunch time for producing a deal.

Brown is pushing for reductions in pension benefits for current police and firefighters, saying the current level of benefits is unsustainable when the pension fund's assets can only cover 43 percent of future pension obligations.

John Keane, executive director of the Police and Fire Pension Fund, repeatedly said the fund wants to keep pension benefits unchanged for current employees.

"Guys, this is where it gets harder," said former state Sen. Rod Smith, a Gainesville attorney who is moderating the talks.

Keane put forward an offer committing $100 million in payments from the fund to help City Hall make its annual contributions and pay down the $1.65 billion unfunded liability, which is the shortfall facing the fund in paying for future pension obligations.

Keane said $63 million of that money would be available for City Hall in the 2014-15 fiscal year. He said the city could use that money to help pay its $153 million annual contribution to the pension fund, so the city's cost would just be $90 million from its hard-pressed budget.

But a big chunk of the money offered by Keane would involve returning money to City Hall that the city previously paid to the pension plan.

The pension fund has about $33 million in a "city budget stabilization account" that has accumulated some of the cash contributed by the city in past years for the pension plan. Keane offered to give all that back to the city.

Keane also offered to turn over to the city almost $28 million the pension fund has banked in a reserve account that holds unused insurance premium tax proceeds, which the state forwards every year to police and fire pension funds across Florida.

By state law, those insurance premium tax dollars - also known as Chapter funds - are for enhanced pension benefits for police and firefighters, but Keane offered to send the money to the city for regular pension contributions.

The Police and Fire Pension Fund gets about $10 million a year in insurance premium tax proceeds. The fund already uses half of that to help the city pay its cost for supporting the pension plan. The fund taps another $2 million for annual retiree bonuses.

The rest has been going into the reserve account, but Keane said the fund would dedicate it instead to the city for pension costs. He said those annual payments - on top of the $61 million immediately given to the city - would continue until the total reached $100 million. …

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