Pew Trust reviews latest pension agreement
Updated On: Jun 17 2014 05:36:34 PM EDT
A national non-profit organization that has followed the city's underfunded Police and Fire Pension Fund has released its analysis of the latest agreement which is pending City Council approval.
The 57-page bill that spells out details of an agreement between Mayor Alvin Brown and Pension Fund executive director John Keene spells out a plan to catch up on $1.7 billion deficit pension funding was introduced to Council last week. It also is awaiting approval of the full Police and Fire Pension Fund.
The agreement came after two months of negotiations that included the input from Pew Charitable Trusts and calls of "shared sacrifice" from both the city and the employees covered by the pension plan and would result in no changes of benefits for current retirees.
The city agreed to contribute an additional $40 million above normal payments toward the liability until its 80 percent funded of when the financial aspects of the deal end in 2024.
The agreement also increases the contribution of current and future employees contributing more, a shortening of the agreement from 30 to 20 years and an increase in transparency and accountability in the fund.
The pension fund also agreed to contribute about $61 million to the city when the deal is agreed upon and another $8 million for the next seven years.
A dedicated funding source is still not identified for the city’s $40 million. A retirement task force meeting early this year recommended a property tax increase that could be replaced by voter-approved sales tax. The mayor's office has repeatedly resisted any tax increase.
In addition to concerns about where the money will come from, several council members also expressed concern over aspect of the deal, including a guaranteed 3 percent cost-of-living increase for each year of agreement.
The Pew Trust pointed out that the agreement differs from the recommendations of a retirement reform task force in that it leaves cost-of-living benefits unchanged and uses reserve funds to help pay down the debt.
The analysis concludes: “Taking into account the changes from the original recommendations, this agreement represents substantial long-term savings to the City, achieves the new plan design recommended by the Task Force, commits Jacksonville to a disciplined funding approach, and includes virtually all of the governance recommendations. Pew’s analysis is that this proposal contains the vast majority of the Task Force’s recommendations and offers a comprehensive solution to Jacksonville’s public safety pensions.”
Copyright 2014 by News4Jax.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.