St. Louis aldermen approve pension cuts, but court battle looms

2012-07-14T00:15:00Z 2012-10-10T13:49:52Z St. Louis aldermen approve pension cuts, but court battle loomsBY DAVID HUNN dhunn@post-dispatch.com > 314-436-2239 stltoday.com

ST. LOUIS • After seven months of debate and years of discussion, aldermen on Friday finally approved the first comprehensive overhaul of the firefighter retirement system ever to pass through city government.

The bill, the third and final pension-related measure pushed by Mayor Francis Slay, rolls back five decades of incremental increases won by firefighters, resulting in greatly reduced pension benefits for new hires and some cuts to current employees.

Slay's office estimates the changes will save $8 million a year, and keep costs relatively level over the next decade.

The final vote was closer than anticipated. Two aldermen who were expected to vote in favor of the bill missed the meeting, leaving the tally at 17-10, just two over the 15 required for passage.

Fire union officials pointed to that as evidence of opposition to the bill. "That's not a landslide," said Chris Molitor, president of the International Association of Fire Fighters, Local 73. "A lot of the aldermen understand our concerns."

And trustees of the current Firemen's Retirement System of St. Louis, who have already sued to stop the bills, said they will almost certainly seek a restraining order to block the plan's official start. "As a trustee, I think we're on record in believing that the action taken by the board today is illegal," said retired firefighter and system trustee Bruce Williams.

City officials, however, trumpeted the victory.

"Today the St. Louis Board of Aldermen withstood enormous pressure and stood up for the taxpayers," said Jeff Rainford, Slay's chief of staff and the most vocal proponent of the mayor's bills.

"I'm proud of them," he concluded.

Steve Conway, alderman in the Shaw neighborhood and one of the bill's sponsors, said he'd never seen any bill opposed by firefighters pass through the board. But the mood in chambers wasn't celebratory, he noted. "Nobody cheered," he said. "It's a somber moment for the city of St. Louis, that we've gotten to this point."

The mayor introduced the bulk of his plan to aldermen this past winter, and added a bill this spring.

The three bills close the current Firemen's Retirement System of St. Louis, bar the system board of trustees from suing over benefit levels and build a new pension plan with markedly lower benefits.

Slay has said, repeatedly and insistently, that the city simply can no longer afford the cost of the firefighter pensions, which have risen fivefold since 2001, to almost $30 million this year.

In 1960, the typical firefighter could retire after 35 years on the job with 50 percent of his salary.

But over the years firefighters lobbied for extra benefits, and city officials granted them.

Between 1980 and 2002, city leaders approved about two dozen laws doling out extra benefits. Mayors and aldermen — including Slay — approved extra retiree bonuses, funeral subsidies and sick-leave buybacks worth tens of thousands of dollars per retiree. And they allowed firefighters to retire but continue working, paying them salaries and deferred pensions at the same time.

Now, a 30-year firefighter can retire with 75 percent of his pay, plus hundreds of thousands of dollars in returned contributions, sick-leave buyback, and deferred-retirement funds.

Slay's bill eliminates many of those benefits going forward.

For new hires, it institutes a 55-year minimum age for full retirement, where none existed before. It increases contributions from 8 to 9 percent of pay and, unlike current rules, doesn't give back any of that money to firefighters upon retirement. It eliminates the deferred retirement program and reinstates a 35-year minimum in order to retire with maximum — 75 percent — of pay.

Current employees keep everything they've already earned and are allowed some of the perks of the past, such as the deferred retirement accounts. But they, too, must pay the 9 percent contribution rate from now on, and won't get new contributions back.

And all employees going forward are subject to much stricter disability retirement rules — the subject of a Post-Dispatch investigation this year — which would cut pay to as little as 25 percent of a disabled firefighter's salary, require periodic medical exams and annual income tax returns.

Fire union leaders, system trustees and their allies on the board don't dispute that the system needed reform. They worked to get their own bills through the state Legislature. But, opposed by Slay, they ultimately failed.

The bill passed Friday, they say, is illegal.

First, they argue, the aldermen can't change benefit levels alone because the retirement system is a state creation and the Legislature must approve changes.

Second, they say that the city can't change any benefits for existing firefighters, whether already earned or not. The employment of a firefighter, they argue, is essentially a contract, locking in the benefits awarded upon hiring.

System trustees' suit challenging the mayor's bills is pending in court, with a ruling on one part expected later this month.

Still, few if any firefighters showed up at City Hall Friday.

After months of fighting, they were resigned to what seemed an inevitability.

"I expected full well that they would pass it," said retired firefighter and pension system Chairman Len Wiesehan. "We'll let the courts handle it now."

Copyright 2015 stltoday.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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