The eight-member Fire and Police Pension Board is expected to vote at 9 a.m. today on proposed changes to the pension plan. Details include:
* Minimum retirement age for nonvested members is 50; new hires 55
* Employee contribution increases from 8 percent to 11 percent, or 9 percent to 12 percent over the next three years
* Retiree cost-of-living adjustment capped at an average 1.5 percent
* The DROP no longer includes interest; employees have the option to stay three extra years without losing the benefit
* Benefits for beneficiaries of those killed in the line of duty increase to 100 percent
Source: Fire and Police Pension Board
As dozens of police and firefighters packed a meeting room for their last chance to publicly address proposed changes to their pension plan before today's scheduled vote, Fire Capt. Tim Zink questioned why the city is cutting his paycheck.
"I have guys working with me that have to have a second job or they would have to get on food stamps or welfare," Zink said Wednesday. "That's sad that the city of Chattanooga can't afford to pay people who put their lives on the line. Now we're going to take an extra 3 percent pay cut."
Zink was among retired and active officers and firefighters who criticized Chattanooga Mayor Andy Berke's proposed pension plan reform that will hike employee contributions by as much as 37 percent, cut retirees' cost-of-living adjustments and save the city $5.1 million in contributions next year. Several public safety employees asked the board to delay the vote to give them more time to talk about a plan that everyone can agree on.
If Fire and Police Pension Board members approve the reform plan today, the final step is a vote by the City Council.
Pension fund administrator Frank Hamilton said the board already has looked at every legal option to reduce the city's contribution while keeping a defined-benefit retirement plan mainly intact. The mayor's plan is the option that accomplishes that goal.
"Over the last few years this board has looked at everything," Hamilton told the group.
Berke appointed an 18-member board in July to study how to reduce a $150 million unfunded liability in the fund while still retaining a viable workforce. After 13 hours of negotiations behind closed doors on Jan. 9, the board emerged with a consensus plan that Berke accepted the next morning.
The debate roiled fire and police ranks and prompted multiple employees to retire early, including former Police Chief Bobby Dodd and some of his top staff.
While active employees are upset that higher pension contributions will cut into their take-home pay, the bulk of complaints are coming from retirees whose automatic 3 percent COLA raises are being reduced to an average 1.5 percent. Some retirees and current employees protested the change before the City Council and the pension board.
City officials and union leaders say most employees accept the proposed changes and only a few are complaining.
"Any kind of change will bring resistance, whether it's change for the good or the bad, and so that's what we're facing," pension board President Chris Willmore said.
Nashville law firm Agee Owens, hired by some retirees, has questioned whether it is legal to reduce COLAs for those already retired. The City Charter states the city can't reduce "any vested financial benefits," according to the letter, which was given to board members Wednesday.
Pension board attorney Bill Robinson said the board reviewed the reforms in light of a recent Tennessee Supreme Court ruling from Shelby County in which the high court found that changing public pensions doesn't violate the state constitution and isn't a breach of contract. Robinson also argued the COLA has never been challenged in Tennessee as a benefit.
Willmore acknowledged the retirees' concerns, but also pointed to an internal memo from Agee Owens noting that public employees elsewhere have filed lawsuits over similar concerns but none have successfully challenged pension reform on constitutional grounds.
"The best chance for the retirees in Chattanooga to avoid these adverse changes is to stop pension reform from being enacted in the first place," the memo states. "If Mayor Burke [sic] succeeds in codifying the changes, they will probably survive all legal challenges and remain in place."
Contact staff writer Joy Lukachick at firstname.lastname@example.org or 423-757-6659.