I appreciate this just-the-facts analysis of the city’s pension funds. It’s delightfully free of fearmongering and doomsaying, which tend to cloud most stories on the funds. I don’t have anything specific to say about the article, but I do want to make a few general points about the city’s pension situation.
1. I reject the idea that pensions “need” to be replaced by defined contribution plans. The only true winners in that scenario are the fund managers, and they don’t need the help. There’s no reason why the pension funds can’t be made solvent, and no reason to replace them given that.
2. That said, I don’t object to offering a “blended” defined contribution/defined benefit option, as long as it truly is optional. I don’t expect it to be much of a difference-maker if one is offered, however. Police officers and firefighters tend to be in it for their careers, and those that do leave early often do so either involuntarily or because of unforeseen circumstances, like a spouse taking a job elsewhere. Such people, unless they were unusually gifted with foresight, would have had no reason to eschew the traditional pension option. Perhaps this would be more popular with municipal employees, but again, my suspicion is it would be a fairly small piece of the puzzle.
3. For all the fuss over “meet and confer”, it should be noted that it’s a bit of a double-edged sword for the city. Meet and confer lets the city negotiate how much it pays into the funds each year. That gives it some cost control, but it doesn’t make the financial obligation go away. If the city had paid more into the police and municipal funds over the past decade, the problem we face today would be smaller. I don’t expect the city enters annual negotiations with an eye towards increasing the amount it has to pay that year.
4. The city would also like to negotiate things like the deferred retirement option and automatic cost of living adjustments with the firefighters. I don’t think these are unreasonable things to want to discuss. The firefighters maintain that Mayor Parker could negotiate with them any time if she really wanted to. Mayor Parker, I am sure, would say that it’s the firefighters that refuse to sit down with her. The only thing we know for sure is that there’s no love lost between the two sides. I don’t think it should be a requirement that the Mayor and the firefighters like each other for them to talk with each other. But if there’s no other way, then maybe we do need a law.
I don’t know how this story ends. So far all the talk is at the city level, but if anything fundamental is to change it will have to come from the Legislature, where much to the Chronicle’s dismay there’s no sign of any activity there. Maybe there will be in 2014, I have no idea. But this is where we stand now. If we’re still standing here when the 2015 elections roll around, I won’t be surprised. Texpatriate has more.