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Louisiana House passes final bill on New Orleans firefighter pensions, ending decades-old dispute

by mark ballard This email address is being protected from spambots. You need JavaScript enabled to view it.

JUN 5, 2016 - 1:23 PM

 

The Louisiana House gave final passage Sunday night to the last of the four bills ending a feud that has been going on between the City of New Orleans and its firefighters for almost 40 years.

The package of four measures will put into law the compromises both sides made to end an ongoing dispute over back pay and the set-up of pensions for city firemen.

“We had worked out an amendment in the Senate,” chief sponsor Rep. Walt Leger III, D-New Orleans, said in asking his colleagues in the House to agree with the changes.

 

It took longer to count the vote than it did to recommend the House agree to the new wording. The House agreed on an 89-0 vote.

House Bill 58 was the last measure over which the two sides bickered throughout the legislative session, which ends Monday at 6 p.m.

The other three bills in the package were approved last week and are on their way to the governor’s desk. Gov. John Bel Edwards must sign all four bills for them to become law.

Since the 1970s, city firefighters and successive New Orleans mayors — most recently Mayor Mitch Landrieu — fought over the dismal state of the firefighters’ pension system and over a decades-old $75 million lawsuit against the city over back pay.

The retirement system had fallen to near insolvency due to poor investment decisions and what the Landrieu administration said were policies overly generous to retirees. Landrieu argued that back pay the city owed the firefighters and the pension problems were linked.

Firefighters won a court order last year holding the city in contempt for failing to pay the back pay judgment. Landrieu was ordered by the court not to leave his house on weekends. (The Louisiana Supreme Court stopped that ruling from going into effect.)

Landrieu responded that the firefighters needed to negotiate the deal or he would give up on the process.

A deal was struck that gave firefighters their money in exchange for agreeing to supporting a package of bills that overhaul the pension system.

The four bills are the result of the deal.

 

Generally under the pact, newly hired firefighters will have to work longer before retiring and receive less in benefits.

House Bill 56, would raise the retirement age from 52 to 57 and lower the rate by which retirement benefits are calculated. The accrual rate is now 2.75 percent; under the legislation, that multiplier becomes 2.5 percent. That means the benefit would be the product of years of service times final compensation times 2.5 percent.

House Bill 57 would base the contributions to the retirement system on compensation instead of salary. Compensation includes factors such as overtime and lump-sum pay.

House Bill 58 would restrict those firefighters — including the 60 or so already in the Deferred Retirement Option Plan — from also participating in the Partial Lump-Sum Option Payment Account. DROP allows working employees in the last five years of their careers to start being paid retirement benefits while also collecting a paycheck. PLOP allows retirees on their last day of work to take a lump sum payment from their retirement accounts.

House Bill 59 codifies the way sick and annual leave are treated in calculating benefits.