08-09-1995 FSTFSR MIN - Laserfiche WebLink

Home Browse Search

Fire Department Task Force Meeting Page 2 August 9, 1995 • Bob felt that maybe the 2 percent state aid should be excluded from the per hour calculation. Hank indicated that a new rate could be determined excluding state aid. Tom requested an explanation from the Mayor on what the city sees as its liability. Hank indicated that there are many unknowns which cause concern. He questioned why the city should take on the liability of a pension fund over which it has no control including the fact that it does not have control over investments. He also stated that in 1981, the per year benefit amount was$400. It is now$2,350. He felt that that was a very substantial increase. He indicated that the City Council was in error in raising the contribution level to$2,350 for 1995 because the fund does not have assets to support it. Bob felt that the defined benefit plan was a system of checks and balances. Hank stated that in order for an increase in the defined benefit plan to be approved by the City Council, a larger balance will need to be in place. Tom expressed concern that there is no guarantee that the city will contribute in the future under the defined benefit plan. Hank stated that he will suggest that the City Council contribute only the minimum contribution if the plan remains a defined benefit plan. Bob was concerned that the Council was treating the firefighters unfairly for staying with the defined benefit plan. He felt that it hasn't been demonstrated to the firefighters that it is in their best interest to change. He further stated that he does not know why this is such a big concern to the city. Hank addressed those issues stating that there currently is no compensation plan for the firefighters and the Council felt that there should be. Second, under the proposed plan, • the City Council would have no future liability after making annual payments to the plan. Third, the annual request from the firefighters to increase the pension amount could be eliminated. He felt the firefighters should get the benefit of increased assets without the City Council having to second guess the firefighter requests. Finally, he stated that if the City Council is required to reevaluate and approve the Relief Association's request, the Council must be conservative in the amount it approves in order to eliminate future liability. Bob suggested that the Relief Association be funded at 110 percent of the per year pension amount. If this is the case, the City Council does not need to approve the pension amount and the only liability to the Council is for the amount previously approved by the Council. The Mayor did not indicate that the City Council would approve an increase in the future even if the pension was 110 percent funded. Randy requested a further explanation of the city's view of the liability. Hank stated that we need an actuarial study which projects out ten to fifteen years versus the one year snapshot that the state schedules provide. Randy stated that the main problem with defined contribution is the unknown such as is there going to be a city contribution. The Mayor stated that he cannot see that the contribution would decrease. Tom stated that until the per year benefit reaches the maximum allowed by law, he doesn't see a need to change. Hank again expressed his desire to present his proposal directly to the firefighters. Tom again stated that the direction from the membership was that the Task Force continue to work on this issue and that the presentation should not be made directly to the fire membership, but should go through the Task Force. He stated that the membership plans to stay with the defined benefit plan and work to negotiate a pay raise and contribution level.