Pension change planned for new firefighters

04/19/2007

Marissa Yaremich , -Register Staff

WEST HAVEN — After several years of negotiations, the West Shore Board of Fire Commissioners plans to enact Friday a major change to firefighters’ pension plans. The plan is designed to curb district spending, something that district residents have been complaining about for the past year.

But some of those same taxpayers, who banded together as the West Haven Taxpayers Association, said the move isn’t as impressive as fire officials might believe.

Even still, both sides agreed that chipping away at how the district handles its pension plan for existing firefighters (that now calculates a $30 million unfunded liability) is a benefit for those taxpayers whose money supports the independent district.

Fire Chief Harold C. Burns and Commission Chairman Bob Pimer said this week the fire board plans to vote Friday to amend the firefighters’ contract to allow the district to invest in the state’s Municipal Employee Retirement Fund to fund pension plans for new hires only. The vote will occur at 7:30 p.m. at the West Shore Fire District Headquarters, 860 Ocean Ave.

"I’d like people to understand this is a major, major accomplishment and a major (potential) change, but I think we (still) need a comprehensive plan for the pension as a whole," said Burns.

The state Comptroller’s Office administers the Municipal Employees Retirement System under which MERF falls. MERF’s statewide investment pool includes 97 municipalities and is guaranteed.

Under MERF, the district would annually fund 9 percent to 10 percent of the new hires’ gross salaries, compared to the current 18 percent annual contribution. The district has 30 employees and 31 retirees.

If approved by the board, and then by the state in May, the change could immediately affect up to six firefighters vacancies the district is advertising to fill.

Firefighter William Spiegel, the firefighters’ union steward, agreed with Burns that the policy change "is the best plan to put in place" because it is a cheaper pension alternative, but continues to protect the incoming firefighters, while simultaneously allowing the district to meet its pre-existing pension obligations.

Mark Milano, president of the West Haven Taxpayers Association Inc., argued the district is simply masking the old expensive plan with the same "archaic" defined benefit plan when pension trends otherwise indicate private employers are turning defined contribution plans, like 401(k)s, to retain employer contribution flexibility. The real money saver, he added, would have been to ask the union to amend the existing employees’ pension plan.

Milano further contested the potential for MERF’s rates to increase, as well as Burns’ preliminary actuarial figures, suggesting a 401(k)-type a plan would annually cost the district 15.5 percent of new hires’ gross salaries.

Thomas C. Woodruff, director of the Retirement and benefit Services Division within the Comptroller’s Office, said West Shore is only locked into the 9 percent to 10 percent annual rate of MERF for two years and that rates could fluctuate after recalculation. However, he added, the MERF plan is currently in a surplus and over the last few years, participants’ rates have increased or increased by only .25 percent.