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untanglingwebs
El Supremo
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I watched the news tonight and saw Raul Garcia speaking on behalf of firefighters nearing retirement. According to the story According to the story a naumber of Flint Fire and Police officers are talking to the Human Resources about retirement. It appears the chance for an Emergency Financial manager that can void union contracts is a big part of theis possible large scale exodus from the city.
Will the city replace the firefighters if they retire ? If not will it impact the Safer Grant for the Fire department? |
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Fri Mar 04, 2011 3:07 am |
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untanglingwebs
El Supremo
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Our Voice: Public employee pension talk has some eyeing the door to retirement
Published: Sunday, April 10, 2011, 5:21 AM
By Editorial Board | The Flint Journal The Flint Journal
For a good understanding of why Flint’s public employee costs are driving the debate over city spending and deficits, public pensions are a good place to start.
Some city employees see the writing on the wall, and aim to get out while the getting is good. If they can, perhaps they better. It is likely that pensions for those so-called golden years are on the brink of shrinking for public employees.
Retirement sooner rather than later would help them retain larger pensions and let the city lower employee costs with new hires brought in at lower pay rates or reduced benefits.
Late last month, the city’s finance department told the City Council that Flint’s contribution to its employee retirement fund for fire, police and general employees would have to increase $4 million in the next budget.
That’s just to keep pace with the obligations the city agreed to in its employee union contracts over the years. Flint’s pension funds, like others around the nation, took a bath in the recession. But the money is still owed present and future retirees.
What that experience showed was that the economy would not continue to always grow by leaps and bounds; the assumptions upon which pensions were based aren’t affordable in the long run.
It’s a predicament that Flint is in now, and that Mayor Dayne Walling says he wants to address.
Walling is looking at the pension multiplier used to calculate each retiree’s benefit, which he told the Flint Journal Editorial Board, “would have a major long-term effect on our costs.”
A pension multiplier works like this: An employee who retires after 30 years with an average annual pay throughout employment of $50,000 and a multiplier of 2.5 percent would stand to collect a pension of $37,000 a year (30 times $50,000, times .025).
The math takes off considerably from there to cover the more than 700 city employees. But suffice to say the city has to ensure that it has enough money in its pension fund to pay retirees.
So, when Walling says he wants to reduce the multiplier, he’s talking about reducing the annual amount each retiree would get. It’s along the same line of what Gov. Rick Snyder has proposed for local public employee pensions. Snyder wants a multiplier of 1.5 percent; 2 percent for employees who aren’t eligible for Social Security.
In Flint, Walling told us the multiplier for public safety unions is 2.6 percent; he wants it down to 2 percent. At that lower rate, the retired employee in the previous example would get a pension of $30,000 a year. At 1.5 percent, the pension would be $22,500.
Multiply the savings by hundreds of retirees a year, and you get the budget cut that Walling is after.
So, when we hear people such as Flint firefighters union President Raul Garcia say he may join nine firefighters who have announced their retirements, with 20 others thinking about it, it’s certainly understandable. He and others who can might well be better off in retirement now than they may be in the months to come.
How can we be certain their pensions won’t be chopped down or yanked in these never-ending budget crises? Well, nothing is absolute, but Gov. Snyder is urging local governments to honor existing agreements, while pushing for major changes in the very near future.
All of these calculations and all of this talk about benefit cuts boil down to the stark fact that Flint, like a lot of local and state governments — and private employers — made promises to employees that they could not keep.
The promises have to change, going forward, so Flint and other cities don’t sink into insolvency.
It’s not sold as an incentive for employees to retire, if they are able to do so. But we can see why some are considering the leap from the workplace before the multiplier changes.
In the long run, such a decision may help them, and, leaving so many positions open for less expensive new hires, help the city of Flint.
numero407 April 10, 2011 at 9:24AM
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What Tricky Rick Snyder wants and what he gets are two different things. I can see the city wanting to lower the multiplier for new hires in the future. That can be negotiated in a new contract. The current one expired two years ago. The City won't be hiring anyone soon . They have laid off in excess of 80 Officers. I'm curious as to how much money the city saved with those cuts. Where did those savings dollars go? Dawn Jones is being paid 80,000 out of the police department budget. How many 911 calls for service has she answered? The personnel department continues to hire freinds and relatives of local clergymen, councilpersons, and Mayoral appointees. Including a Crack using Blight Inspector. ( No doubt to gain support for the Mayors re-election bid this year.) Cut the fat inside city hall before raping public safety again. All of this reducing pensions talk is designed to " Clean House" in the Police and Fire Departments. The Mayor has a problem, he wants to be re-elected but he cannot lay off anymore Police Officers. He also cannot lay off Fire personnel due to the Federal grant the city received. So what is left? Attempting to scare people who have worked in excess of 23 years into early retirements. "Governor Snyder is urging local governments to honor local agreements." Now sit back a read the comments that are sure to come stating that the city is broke and we need to make sacrifices. ( From the paid by this administration posters.) Excellent post Bluesky, I agree with you I have relatives who took early retirements from GM ( Both salaried and hourly) They got screwed by GM after they left.
numero407 April 10, 2011 at 9:27AM
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I wonder how many public safety jobs could have been saved if the Flint Urinal gave back the millions of dollars in tax breaks they received form the City under the Stanley adminstration? |
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Sun Apr 10, 2011 2:30 pm |
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untanglingwebs
El Supremo
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Part of the problem with the pensions is the early retirements given in previous administrations to "save money".
This device merely moves the burden to the pension fund and the city is stuck paying for the health care and legacy costs. Flint can't pay these costs now.
When employees retire or are laid off, they are paid for their unused annual time up to a maximum number of hours. Police and fire even get paid for a portion of their unused sick time.
The ppolice requested an early retirement package during the Williamson administration, but it was determined the city could not afford the costs. As it is some academy classes are approaching the point in time in which they can retire. Most can get a second job somewhere else. The instability in the city makes retirement look like an excellent option.
Pensions were often negotiated as a means of appeasing staff when raises were being requested. The unions in Flint have frequently gone long periods of time without contract renewals. |
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Sun Apr 10, 2011 2:41 pm |
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