FORT WORTH -- The PR campaign for City Council votes on major changes to the employee pension plan moved into a higher gear Tuesday after the city staff released an actuarial report showing that its proposal stacks up favorably to one by the Fort Worth Police Officers Association.
The council is scheduled to decide next Tuesday whether to accept the results of a police association vote in which officers overwhelmingly supported raising their pension contributions and leaving more money in the plan through measures such as capping overtime in retirement calculations.At the same meeting, the council is also scheduled to vote on the staff proposal to reduce general and police employees' benefits for future service. The police association says that amounts to a reduction in accrued benefits -- an act barred by the state constitution."As the results of the last decade clearly show, higher contributions -- from whatever the source -- are not going to solve this problem," Bill Thornton, CEO of the Fort Worth Chamber of Commerce, wrote in an e-mail blast Tuesday, referring to a steadily increasing stream of city contributions that haven't closed the fund's nine-figure unfunded liability.On its Facebook page, the police association asked followers to e-mail Mayor Betsy Price and said the proposed pension cuts tell officers: "Do not risk your life to save citizens' lives."Price, who has said the staff proposal is "fair," told council members Tuesday that it's time to vote. "The proposal's been on the table for a good many months," she said.Sgt. Steve Hall, police association president, said the group wants the council to put off its vote or reject the staff proposal and to align ongoing police contract talks with ones that are getting under way with firefighters. "Our goal would be for all of us to sit down like adults and work out a solution to the problem," he said.If the council accepts the police vote, it would be agreeing to negotiate the issue with police officers, whose contract doesn't cover the pension. The staff's proposed changes don't affect firefighters, whose contract is subject to collective bargaining.In Tuesday's report, the staff said its actuary determined that the city's plan would be more effective in checking the $748 million unfunded liability in the Fort Worth Employees' Retirement Fund.The actuary said the police officers' proposed 3 percent increase in pension contributions would have to be significantly higher to allow the fund to pay down its liability in a finite period -- assuming the fund's projected rate of return is lowered at some point to 7.5 percent annually from 8.25 percent.The fund, which sets the assumed rate of return, lowered it by a quarter-point amid the market's meltdown two years ago and said another reduction was likely. The fund is conducting another review next year, and the actuary has indicated that it expects to lower the rate again and update projections to assume longer lives, increasing the unfunded liability.At 8.25 percent, under the staff proposal, the actuary estimated that the unfunded liability would grow to $997 million and take 29.4 years to pay down, within the standard acceptable period of 30 years.The increase in the funding gap would be driven largely by including the liability from a variable cost-of-living adjustment. The staff says the pension liability is understated if it doesn't include the potential impact from the variable COLA, which kicks in based on funding levels and isn't expected to pay off again for 21 years.Some employees previously elected the fixed-rate COLA, and the city is trying to move all its employees there. The city estimates that 90 percent of employees in the variable COLA will move to the fixed-rate COLA.Under the police proposal, the unfunded liability would be $1.028 billion, with the COLA conversion included. The pay-down period would be 31.1 years.At 7.5 percent -- the rate that the California Public Employees Retirement System recently adopted -- the city's unfunded liability would be $1.23 billion and would take 50.3 years to pay down, the actuary estimated. The police proposal would result in a $1.3 billion unfunded liability and, by its structure, would never be paid off, the actuary estimated.Scott Nishimura, 817-390-7808
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