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Pensions, opt-outs voted on, approved by council

By Staff | Sep 10, 2013

The city council had a lot explaining to do in regards to its journey through the pension process for its police and rank-and-file workers during its regular meeting Monday at City Hall.

In the end, the council voted unanimously on numerous pension issues, including one that removes an opt-out clause for the new police chief and replaces it with an alternative retirement plan.

It also gave a council member, who didn’t agree with the decision years ago to hire outgoing Police Chief Jay Murphy, to admit he was wrong.

City Manager John Szerlag said originally the pension opt-out clause, which would have allowed the city to rehire Murphy after he retired, was a viable option provided there was no guarantee. That opinion held until August when it was learned Murphy could not be reemployed without doing damage to the pension system.

“Had I known this would not be allowed, we’d have a new chief by now,” Szerlag said, adding that he wanted to bring the opt-out for chiefs, but also the ability to enroll in a 401(a).

Allowing a new chief to choose a pension program alternative also allows for the hiring of an experienced chief who might not want to work the 10 years needed to fully vest into the system.

Murphy will now step down Sept. 20. He received compliments from the board, including one from Councilmember Chris Chulakes-Leetz who made public a private discussion he had with Murphy before he became chief.

“I voiced a strong opinion against him and I was wrong. He has been stellar. The last two years of his leadership have been the best in my time here,” Chulakes-Leetz said. “We will lose a great leader now that I realize I can allow myself to be wrong.”

Chulakes-Leetz led the small crowd to a standing ovation.

Other pension-related issues followed.

Even though Szerlag was quick to point out the $125 million in savings over 25 years thanks to a bargaining strategy, there were other concerns.

Brian Fenske discussed concerns about some of the concessions and that it would be more difficult to come up with new savings.

He said the average pensioner earns $18,672, with the median being around $13,000 per year.

“Some think that pensions are exorbinate, but that’s not the case,’ Fenske said. “You’ll see sustainability come to fruition. We had to be creative to save money and keep benefits going.”

Councilmember Kevin McGrail said the numbers don’t lie regarding the reality of pensions.

“Don’t listen to all the misinformation about the $95,000 a year maximum on pensions. Check the facts before you out up your website,” McGrail said.

Mayor John Sullivan worried about the cost of living adjustment and that retirees could lose their buying power if a spat of inflation hits and the 2.5 percent increase can’t cover it.

“Results in the past don’t indicate what will happen in the future. I don’t want people starving to death in five years,” Sullivan said.

Sullivan said the contracts will be renegotiated again in a short time, therefore he also supported all the measures.

Among the things the ordinances did was to revise retirement dates and the COLA, provide for the maximum pension benefit, and revise the vesting schedule for members hired on or after Oct. 1.