JACKSONVILLE, Fla. -- Mayor Alvin Brown unveiled a retirement reform initiative that he says would save the city an estimated $1.5 billion over the next 30 years.
The mayor says the Police and Fire Pension Fund (PFPF) has a high level of unfunded liability, with assets worth $400 million less than its total pension obligations in 2003 to $1.4 billion by October 2011.
Retirement challenges are also growing, according to the City of Jacksonville. The annual contribution to the PFPF for employee pension benefits was $76.1 million in Fiscal Year 2010/2011. In the new budget from City Council for Fiscal Year 2012/2013, the obligation grew to $121.3 million, a 60% increase over two years.
The mayor says these numbers show a need for reform.
"I greatly respect our brave public safety officers and the important work they do for our community," said Mayor Brown. "In this period of financial challenge, our current retirement system is no longer sustainable. It is broke and we have to fix it so we can protect the long-term economic security of public safety employees while also protecting taxpayers.
The mayor plans to reduce the assumed rate of return on PFPF investments from 7.9 % to 6.9 %. The mayor is also proposing a series of benefits changes to many current and new employees. The changes would not impact city employees who are already retired, or current employees who are eligible for full retirement by the time the new plan is implemented.
The retirement benefits plan is something that did not get specifically addressed when the city and four unions reached agreements on four new labor contracts this year.
Mayor Brown plans to present his retirement reform proposal for AFSCME employees in the General Employees Pension Plan at a collective bargaining meeting on Tuesday, Oct. 30.