JACKSONVILLE, Fla. -- Jacksonville Mayor Alvin Brown's plan for pension reform for police employees was unveiled on Monday by the city's negotiating team to the Fraternal Order of Police Lodge 5-30.
According to a release from the city, the plan will save an estimated $1.5 billion over the next 30 years.
The two main aspects of the plan include changing the pension fund's rate of return to a what the mayor's office calls a "realistic one," and only making the changes for new and current employees, not past employees.
MORE DETAILS: Retirement reform handout
The Police and Fire Pension Fund has "a high level of unfunded liability," according to the release. By October 2011, the deficit of the PFPF had grown to $1.4 billion. In Fiscal Year 2010/2011, the city's contribution to the PFPF was $76.1 million. By FY 2012/2013, the city's contribution obligation had grown to $121.3 million.
The Mayor's proposal includes lowering the assumed rate of return on investments into the fund from 7.75 percent to 6.9 percent. PFPF advisers say this is a more realistic rate, according to the release.
Also, no former City of Jacksonville employees will be affected by the changes, nor will any employees eligible for retirement when the plan is implemented. However, "it will modify future benefits they earn after the new plan is implemented," according to the release.
MORE DETAILS: Retirement reform fact sheet
"I greatly respect our brave public safety officers and the important work they do for our community," said Mayor Brown. "In this period of financial challenge, our current retirement system is no longer sustainable. It is broken and we have to fix it so we can protect the long-term economic security of public safety employees while also protecting taxpayers."
New labor contracts agreed upon by the mayor and the four unions -- the Jacksonville Supervisors Association, the Jacksonville Association of Firefighters, the American Federation of State County and Municipal Employees and the Fraternal Order of Police -- are projected to save $33 million over the next three years, according to the release.
In these labor agreements, retirement benefits were not addressed, but required that meetings be held to address them. The retirement reform proposal will be presented to AFSCME employees in the General Employees Pension Plan on Tuesday.
According to the mayor's proposed plan for current police employees, they would need
to work 27 years to get their full pension, but they would not be able
to collect it until age 60. Currently, they can get full retirement
after 20 years of service.
The employee contribution would double
from 7 percent to 14 percent if the mayor's plan is approved. This
would not affect those already retired or those who are qualified for
retirement. The mayor's reform plan would not rely on an increase in the millage rate.
First Coast News