New IAFF contract cuts pension benefits for
new Lansing firefighters
December 6, 2014
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Did you know that a new contract between
the City of Lansing and the firefighters union (International
Association of Firefighters Local 421) was signed on
April 29? I didn't either until I heard it mentioned at the November 18
meeting of the Police and Fire Retirement Board.
I requested a copy of the new contract
under the Freedom of Information Act, but all I got was a 2-page "tentative
agreement." Must be the changes have not yet been incorporated into
the contract.
Here is the old contract, which expired June 30, 2010.
Some of the changes are in regard to
retirement, and we can see them reflected in proposed changes to the
Police and Fire Retirement
System ordinance. Those changes are included in the
packet for the November 24 city council meeting,
starting on the 28th page (pages are not numbered).
Some of the changes apply only to "new"
firefighters, those hired after the April 29, 2014 contract ratification. We will start with the changes that apply equally to old
and new firefighters.
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Wages |
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Signing bonus: Each member
gets an extra $1,000 in the first pay period following
ratification. However, it is not counted as part of base
pay and therefore will not affect the pension amount.
Base pay was
increased by 2% on July 1, 2014 and will increase by another
2% on July 1, 2016. |
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Pension |
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The pension is limited to 110% of base wage at the time of separation. "Base
wage" is undefined. (The
current ordinance defines base wage as "base wage.") I can
only guess that they mean "base salary," which I would calculate
as hourly wage times number of hours per week times 52.
Number of hours per week for firefighters in the "fire
suppression division" is not the standard 40, and is not
clear to me,
as I said here.
The new limit seems to be higher than
the old limit, which was 80% of final average compensation (FAC).
The old limit was a cynical joke because, by
definition, the limit can never be exceeded. The pension is
calculated as FAC times 25 years times 3.2%. 3.2% of 25 is 0.8, or
80%. In other words, the pension is 80% of FAC.
I've attempted to compare old
and new limits for a few retirees
here.
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Health Insurance |
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The following is exactly what
the tentative agreement says; since I don't understand it, I
won't attempt to explain:
Base Plan: 100% City paid up
to the state mandated hard cap + $400 cash bonus incentive
Option 1: 100% City paid up to
the state mandated hard cap
Option 2 (IAFF Current Plan):
employees may buy up to Option 2 by paying the difference
between what the City will pay for Option 1 and the cost of
Option 2.
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Minimum Staffing |
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Minimum daily staffing: 41
Minimum unit staffing:
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Stations with less than 2
firefighting apparatus: 4
Stations with 2 or more
firefighting apparatus: Will staff at least one fire company
(engine, ladder, quint) with 4 personnel; additional
in-service (engine, ladder, quint) will be staffed with no
less than 3 personnel in dual company stations. |
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Now for the changes that are not the same
for both groups:
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New firefighters |
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Old firefighters |
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Pension |
7% employee contribution rate.
Must have 25 years of service,
but can't retire before age 50. (Nobody gets credit for
service over 25 years.)
Pension multiplier is 2.5%.
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Employee contribution rate
increases to 10% from the current 9.08%.
No change: Can retire at any
age with 25 years of service.
Pension multiplier remains
3.2%. |
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Retiree Healthcare |
Employee-only coverage (no spouses or dependents) with
establishment of voluntary employee-funded health savings
account. |
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Spouse and dependents continue to be covered. |
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It appears that the only
hit the old firefighters take with this new contract is an
increase in the employee contribution to the retirement system from
9.08% to 10%. It is
the new firefighters who are shouldering the burden of reducing
Lansing's underfunded retirement systems. A
December 1 story on WILX says that former mayor David Hollister,
chairman of the city's Financial Health Team, "estimates the city owes
$600 million in pensions and benefits for retirees -- the equivalent of
doubling property taxes for the next 20 years".
It is the new firefighters who can't
retire before age 50.
It is the new firefighters whose pension
multiplier is 2.5% rather than the 3.2% enjoyed by the old firefighters.
And it is the new firefighters whose families won't get health coverage
after retirement.
They do get one break: Their contribution to the
retirement system is only 7%, while old firefighters will have to pay
10%.
As I said at the top, I became aware of
this new contract - which was signed April 29 - in November. Since then,
my Google searches have revealed no news stories about it. I would search
the Lansing State Journal's archives, as I have done in the past, but
can't find them in their new online edition.
Of course, the media would
not likely have known about the new contract unless the City made an announcement.
What goes on in collective bargaining sessions is kept out of the
public's view, even though it often affects the city's financial
situation. In this case, it will result in changes to a city
ordinance, and neither the public nor the city council have any say
about it. Not to accept the changes would be considered "failure to
bargain in good faith" - an unfair labor practice.
In the public sector, collective
bargaining rights trump democracy.
There will be a public hearing on the
retirement ordinance changes at the Monday, December 8 city council
meeting. Thinking of speaking on the issue? Don't waste your
breath.
Send comments to
stevenrharry@gmail.com.
Previous stories:
-
80% of
contributions to police union PAC goes to telemarketer -
November 30, 2014
-
Lansing subsidizes second careers for police and firefighters
- November 18, 2014
-
Survivors of public safety workers
who die in line of duty get
$333,604.68 from feds, $25,000 from state - November 6, 2014
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Auto dealers get what they pay for
- October 29, 2014
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Elderly state retiree defends pension tax
- October 9, 2014
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Why death "in line of duty" matters:
$333,604.68 - September 26, 2014
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How dangerous is firefighting?
- September 21, 2014
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Do City, BWL managers contribute
voluntarily? - August 25, 2014
-
Bernero sends a message
- August 31, 2014
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Ingham, Eaton, Clinton counties get
lots of free military stuff - August 25, 2014
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Non-candidate Virg Bernero rakes in $41,300 at breakfast - July 29, 2014
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Is $66,000 too much for unskilled
labor? -July 18, 2014
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Taxing corporate income - July
12, 2014
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Fund road repairs by increasing the
income tax - May 25, 2014
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