A roomful of Chattanooga firefighters and police officers were on edge as details emerged Thursday about a contentious pension scenario that would make deep cuts to their retirement benefits.
"The scenarios get worse and worse," said Capt. David Brooks, one of 18 task force members appointed by the mayor.
Thursday morning, he described a recent scenario as the latest proposal from City Hall. The fire captain showed employees and reporters a document outlining retirement changes after a meeting of the Chattanooga Fire and Police Pension Board. It outlines a drastically different benefits structure than the one in place now.
After it was posted on Twitter and Facebook, the mayor’s office quickly disagreed with Brooks’ characterization of its origin. Travis McDonough, the mayor’s chief of staff and task force chair, called it a "distraction."
Other individuals familiar with task force deliberations said it was not a real proposal. One said it may as well be thrown in the trash.
For six weeks, task force members have met privately to review different ideas and scenarios for cutting retiree benefits. Typically, the pension fund’s actuary will run analyses and show how a particular change would impact the retirement system’s funding gap and long-term cost.
• Minimum retirement age between 50 and 58
• Across-the-board 1 percent COLA
• One-year DROP for vested employees
• DROP eliminated for new hires, nonvested employees
• 13 percent employee contributions
• Reduced multiplier for new hires
Source: Pension task force
This particular scenario was first reviewed two weeks ago. It looks at deep benefit cuts for new hires in particular, though all public safety employees would be impacted if it were implemented. Some of its changes would affect different employee groups, based on the number of years someone has been with the city.
The details outlined have not been scored by the pension fund’s actuary, so it’s impossible to tell how much the changes would impact the pension fund’s current $150 million funding gap or the city’s long-term contributions to the fund.
Nor is it likely that there will ever be a cost analysis on its particulars, making it dead on arrival for further consideration.
Vijay Kapoor, director of workforce consulting for Public Financial Management Inc., drafted the document at the request of several task force members Dec. 5.
Five days later, Chris Wilmore, pension board president, described it as an "extreme scenario," worse than any that had been reviewed so far. It wasn’t worth running a cost analysis on because it would be a waste of taxpayer dollars, he wrote in an email to task force members.
Later, speaking by phone Thursday, he questioned claims that this wasn’t a real proposal.
"If nobody was serious about it, why did someone ask us to spend taxpayer money costing it?" he said. "Those aren’t done for free."
Kurt Faires, an attorney and task force member, said it ultimately went nowhere. Had the actuary ran the numbers, it would have just provided a clearer idea of its financial impact. But that never happened.
The task force is involved in a process, not a volley of proposals, McDonough said. A lot of task force members have focused on the problem at hand, worked on it diligently and not created distractions.
"This event will distract the task force from its work," he said. "I’m confident that whatever consensus that’s reached won’t be any of the particular scenarios that have been run," including this one.
No document currently exists that will be the solution to the pension fund, he said.
Thursday afternoon, Brooks stood by his characterization of the document’s origin, saying it was initiated by city officials.
"It’s the worst scenario that I’ve seen since I’ve been on the task force," he said. "If the intention was to shelve this thing from the beginning, we should have started out with it."
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