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AFSCME hasn’t ratified pension plan changes

By Staff | Jan 26, 2011

To the editor,

I have a correction I would like to note regarding your front page article, “Second reading of pension oridinance moved to March,” published in the Jan. 20 issue of the Island Reporter. You state correctly that the City Council imposed certain changes to the Plan and correctly identify those elements. However, your article states incorrectly that “during negotiations, both parties agreed to several retirement plan elements, including vesting period, normal retirement age, grandfather for early retirement, opt-out of defined benefit plan to participate in defined contribution plan and new hires subject to all new plan provisions.”

Although employees certainly understand the need to cut (and have proposed some significant decreases in) retirement benefits to maintain a sustainable pension plan, however, to date, employees have not ratified or agreed to any changes as written in the draft ordinance (No. 11-001) proposed by the city. Nor, to date, has AFSCME negotiated and agreed to the amendments proposed in the ordinance, as written, including the vesting period and opt-out option for a defined contribution plan.

We (along with our attorney) have confirmed this by reviewing our collective bargaining notes, the impasse hearing transcript, and the brief we submitted to the Special Magistrate. GERP member employees did meet on Jan. 13 and voted in agreement only with the grandfathering for early retirement eligibility benefits as proposed. This is not to say that we can’t and won’t ratify the changes or come to an agreement with the city, but to date, we have not yet agreed to the changes as proposed in Ordinance No. 11-001.

In a memorandum provided with the draft ordinance, the city acknowledges that “changes in retirement benefits are mandatory subjects of collective bargaining negotiations, proposed benefit changes to Ordinance 11-001, as written, will require the city to negotiate the changes with AFSCME or obtain a written agreement from the union to make the changes.”

In addition to this correction, I would like to remind you that the Board of Trustees for the GERP meet on Feb. 2, where they will be considering a report of the Plan’s actuarial valuation as of Oct. 1, 2010. Although I am certain that this report will not find the Plan’s unfunded liability going away, however, as you may recall, I requested, by letter of Jan. 10, 2011 that the Board of Trustees calculate changes to the Plan as recommended by the Special Magistrate and a benefit cap as proposed by the union.

The purpose of this request is basic: how can the City Council know what changes are best to make to the Plan (and make a responsible decision) without costing out all options that are proposed and/or recommended? Unfortunately, the City has refused to do so. Maybe the Board of Trustee’s will uphold its fiduciary duty and ask their actuary to calculate the benefits of these changes on Feb. 2.

The Board of Trustees for the Police Officer’s pension plan will also be meeting on Feb. 2. The public should be informed that these meetings are scheduled and open to the public.

Roy Gibson