Fort Worth reduces firefighters’ pension formula, approves new contract

By Scott Nishimura

Fort Worth’s firefighters saw their pension formulas reduced, but have a new four-year contract with pay raises.

City Council members voted 6-3 Tuesday to put current firefighters – those hired before Jan. 10, 2015 – under the same pension formula as other city employees, and voted unanimously to approve the new contract.

The pension vote came after the city and firefighters were unable to reach an agreement on the pension in negotiations on a new contract that included a one-year “evergreen” period that expired Sept. 30. Firefighters had offered up several proposals that included raising their contributions to retain their pension formula; the city, however, has been moving over several years to have all employees working under the same benefits formula.

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“This is not about money,” Jim Tate, president of the Fort Worth Professional Firefighters Association, told council members Tuesday night. “There are no taxpayer savings involved here.”

Tate blamed the pressure that the Fort Worth Chamber of Commerce has put on the city and Fort Worth Employees’ Retirement Fund to bring the unfunded liability on the city’s employee pension into line. A chamber-affiliated group has made extensive presentations throughout the community in recent years, arguing that the fund needs to reduce its assumed rate of return and the city needs reduce benefits for future service.

The chamber group has put the blame for the unfunded liability on a period in the 1990s when the city and fund, in good times, raised the assumed rate of return, increased benefits, and cut back on contributions. The city, trying to correct the problem, more than doubled its contributions to the pension between 2007 and 2010 and now allocates 20 percent of payroll to the pension.

The city cannot constitutionally reduce already-accrued benefits under state law, but Fort Worth’s police and fire associations are arguing in court that reducing benefits for future service is the same as retracting a promise made to current employees when they were hired.

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Tate told council members that the pension changes mean firefighters will work longer because they won’t be able to afford retirement, and he suggested that could lead to unsafe situations for the community.

Citizens who call for emergency service will be greeted by “old men and women” when the fire vehicles arrive, Tate predicted.

“You’re glad you’re there with a key so they don’t have to kick the door down,” he said.

Council members Jungus Jordan, Kelly Allen Gray and Ann Zadeh voted against the pension change. Zadeh asked during the council’s afternoon pre-council meeting whether the city could wait on the outcome of ongoing litigation over its pension changes before acting on the fire pension. Jordan pointed out the city hasn’t yet “moved the needle” on the unfunded liability.

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“The only way to resolve that is by collaborating together,” he said.

City officials have said it will take some time to determine whether all of the pension changes will reduce the unfunded liability.

Recent reductions in the assumed rate of return on investments and increases in expected longevity, for example, increase the funding liability. The city also is moving its employees to a fixed 2 percent annual cost of living adjustment on their pension payments in retirement from a variable COLA, which hasn’t been included in the unfunded liability. Adding the COLA increases the liability.

Councilman W.B. “Zim” Zimmerman agreed with Jordan that the city’s moves haven’t yet been effective in closing the funding gap.

“However, (the fire changes) put the fire on par with the rest of our employees,” he said.

And the city is working through litigation on the pension issue. A lawsuit in State District Court, where the firefighters accused the city of not bargaining in good faith, is “moot” and will be dismissed with the firefighters’ signing of the contract, Tate said.

Tate said the firefighters will now join a federal suit filed in 2012 by Fort Worth police officer Rick Van Houten, representing current employees, and then-Fort Worth Police Officers Association President Steve Hall, representing retirees. At the time, Hall was in the city’s deferred retirement option program and treated as a retiree.

“Going forward, this is all going to get resolved in federal court,” Zimmerman said.

Mayor Betsy Price said the city’s pension is an “excellent plan, even with the changes to come.”

“We have the highest regard for you,” she told firefighters who rimmed the perimeter of council chambers Tuesday night. “You are all heroes in our eyes. I believe the fund is stronger” for all employees.

Key changes in the pension formula include reductions in the multiplier used in calculating benefits, and an increase in the number of years used in figuring base retirement pay.

The new contract includes wage increases of 2.2 percent in fiscal 2016 and 2017, and 3 percent in 2018.

The contract restores the deputy chief rank, which was eliminated when the previous contract expired.