As businesses across town shut down early in anticipation of a thick blanket of snow, Chattanooga Mayor Andy Berke's pension task force held its final meeting to unveil the latest proposal aimed at putting the fire and police retirement plan on a financially sound path.
If approved, the reforms to the Fire and Police Pension Fund are projected to cut the city's contribution level by $5.1 million and lower the city's overall $150 million unfunded liability by 10 percentage points in the first year.
Over 26 years, the changes -- which include hiking employee contributions by 37 percent and reducing cost-of-living allowances for retirees -- is expected to save the city $226 million. The plan is projected to be fully funded by 2039.
"This fund was in very poor fiscal shape at the beginning of the process. The benefits promised were unsustainable," said Vijay Kapoor, a consultant Berke hired to advise the task force. "But this puts the plan on a more sound footing."
During Wednesday night's presentation, Kapoor pointed out that a recent state study showed Chattanooga's Fire and Police Pension fund had one of the lowest overall funding ratios among defined-benefit pension plans in the state.
The meeting took place a month after Berke's 18-member task force reached consensus. It capped six months of heated debate that roiled fire and police ranks and prompted multiple employees to retire early, including Chief Bobby Dodd and some of his top staff.
The next steps will be two public forums Feb. 19 to give employees one last chance to air their concerns and answer questions, followed by a vote by Fire and Police Pension Board members.
A handful of employees braved the weather to attend Wednesday. A few asked why the city held the meeting during extreme conditions, hindering people from attending. Others argued the planned cuts were unfair.
Retirees' automatic cost-of-living adjustments will be reduced from 3 percent to an average of 1.5 percent, and new retirees won't get a COLA adjustment for the first three years.
After several retirees questioned the changes, firefighter Chip O'Dell, who led a recent protest in front of the City Council, went to the microphone. He argued that most of the firefighters aren't happy with what the city has decided.
But Jack Thompson, president of the Chattanooga Fire Fighters Association Local 820, challenged O'Dell, asking, "How many members do you represent?"
Union leaders and the city have argued that opponents make up a small minority of the public safety employees, and most employees are content with the changes.
After Thompson's question, Berke Chief of Staff Travis McDonough listed the improvements the task force had agreed to, such as raising benefits for employees killed in the line of duty and a bump in some widowers' pay.
"Do you support that, Mr. O'Dell?" McDonough asked.
O'Dell said he did. But he chided the task force for not looking at other options to save money, such as capping employee pensions at a captain's pay. That's when Sgt. Tim Tomisek, who is on the task force, cut him off.
"We're trying to preserve our pension. We're trying to make sure we have a pension when we retire," said Tomisek, who is the president of the local International Brotherhood of Police Officers chapter. The police and firefighters said one of their main goals was to keep the defined-benefit plan and not move to a defined-contribution plan such as a 401(k).
"You're going to contribute a little more to your pension and I'm going to contribute a little more to mine and he's going to contribute a little more to his."
Contact staff writer Joy Lukachick at firstname.lastname@example.org or 423-757-6659.