The House Retirement Committee passed four bills Thursday (May 12) to overhaul the Firefighter's Pension System of New Orleans in accordance with an agreement between the city and the firefighters negotiated in October, prompting a fight between the mayor's office and the firefighters' union.
House Bills 56 through 59 modify eligibility for benefits, contribution rates, cash-out programs and the value of sick leave within the Firefighter's Pension and Relief Fund.
Speaker Pro Temp Walt Leger, D-New Orleans, brought the bills and met with the parties involved before the hearing in an attempt to bring peace to the traditionally combative parties.
"Walt is trying," said Nick Felton, president of the local chapter of the New Orleans Firefighters union. "It's like being a marriage counselor."
The parties are still arguing over whether restrictions on a cash-out program, found in House Bill 58, should apply to those who have been in the retirement system for years. The city wants the restrictions to apply only to current firefighters and new hires. The union says that is not fair to those who made retirement decisions based on the options available to them at the time. The union also claims such applications of the restrictions may be unconstitutional.
In his discussion before the meeting, Leger told the firefighters' representatives he agrees people should not have something taken away from them that they made decisions about in the past. However, he noted the firefighters agreed last year to the restrictions applying to more than new hires. He told them also just because they believe something is unfair does not necessarily make it unconstitutional.
Both of the parties agreed to bring the bills, but representatives for firefighters said after the committee meeting the city introduced changes to the bills contrary to the agreement they negotiated.
Deputy Mayor of New Orleans Andrew Kopplin, claimed the structural reforms to the pension system will save $300 million. The reports from state actuary Paul Richmond do not offer specific numbers of cost savings to retirement systems, but do show three of the bills increase the actuarial cost on state retirement systems, instead of saving money like Kopplin claims.
Kopplin said the $300 million in projected savings is over 30 years and came from the entire deal between the firefighters' union and the City, not just from the package of bills. He said $200 million of the total savings comes from stipulations in the agreement that the firefighters' pension would not give out higher cost of living adjustments to retirees until the system is substantially funded. Kopplin noted the majority of the cost savings in the package of bills will come from House Bill 56.
Felton said Kopplin was not telling the truth following the hearing in reference to the $300 million figure.
"There is bad blood," Felton said. "There is an extremely large distrust on both sides"
Felton claimed the reforms would not save anywhere near $300 million, suggesting the reforms might not save any money due to the nature of retirement systems. Felton said the city demanded structural reforms to the retirement system to spite the union.
The majority of New Orleans firefighters are in the firefighter's union and in the pension system, which has an unfunded accrued liability, or lack of funds to pay benefits, of several hundred million dollars. The two parties have been involved in lawsuits stretching back 30 years.
The bills now go to the full House, where more amendments will be offered.