George Mulligan makes a subtle statement at a recent town council meeting. He claimed his tires were slashed ... shortly after he gave his side of the report.

According to findings from a special committee to examine how the town's Pension Fund is managed, the town is either going to have to do something about skyrocketing pension costs soon, or pay some serious consequences later.

According to committee chair Ed Rodriquez, and members George Mulligan and Robert Sammis, the pension benefits given to certain groups of town employees are so generous, they will eventually bankrupt the town if allowed to continue.

The report, titled "Financial Advisory Committee Preliminary Report: Pension Issues," zeroed in on a certain number of police officers that retired in the beginning of January, 2008. These officers, like the 47 that may follow them, are under a plan that allows them to factor in overtime and cash-out payments into the last two years of their service, a practice that frequently catupults their pensions into the $100,000 plus range, according to Rodriguez.

"Often employees are given between a pension of 30 percent of their base pay when they retire and sometimes to a very generous pension of 70 percent when they retire. Never have I heard of a 100 percent or higher," said Rodriguez. "Never have I seen a plan where an employee is making $85,000 a year and then the day he retires he now makes $134,000 a year."

But, Rodriguez added, the committee did recognize the town's efforts to halt this "unsustainable" practice in 1997 by putting employees hired by the town into a plan they called "Plan B", which is based on soley their base salary.

However, he also noted that while newly hired police officers are under the new plan, the Fire Department's 100-strong force is still under "Plan A," the name that designates the old pension plan that allows overtime and other benefits to be factored in.

In the commission's report, Rodriguez stated that at least until the year 2068, the town will be doling out ever increasing amounts of taxpayer dollars to the "Plan A" pensioners, the resulting being, "...ever increasing contributions and ever increasing upward tax pressure. This may be unattainable," he said in the report.

Rodriguez also said in the report that despite bonding and other financial tools that would be available to the Town Council to cover the losses in a bad investment year as well as to accomodate the increasing number of Plan A retirees, the funding will never be quite enough, since "...the full effect of near retiree overtime and the cash-out payments are not recognized in the actuarial calculations," Rodriguez said in the report. "This will also have negative connotations regarding annual funding requirements by the town and increase the tax rate."

The report stopped short of charging anyone of wrongdoing, stating that "formalization" needs to play a larger role in managing the pension plan and the calculation procedures, and that the state of the pension was a natural outcome of negotiation between the town and the employees' unions.

Council Chairman Michael Henrick thanked Rodriguez for delivering the report, and added that Council is already aware of the problems with the pension, as he and former Councilman Norman Aldrich have noted the problems.

"We are all fully aware of the problems and the issues with the pension," Henrick said. "Norm Aldrich has led the fight with that in the past and administrations have worked closely with the unions to alleviate some of these problems. I know there's a lot more work to be done, and I thank you for your work."

Tom Moore, R-8, a member of the pension committee, said he is looking forward to looking at the report in depth at the next Pension Board meeting. Noting that Sammis included in the report ways to lower the cost of the pension plan, Moore said he is looking forward to talking with him more about that.

"Maybe through (Robert) Sammis' contacts in the banking community, maybe we can get them to take a look at this," Moore said. "Maybe there are organizations out there he knows of that can help us, because as you heard, we aren't alone in this."

Mayor James Miron also said he was appreciative of the committee's efforts, and that his administration has been tackling this problem ever since he came to office three years ago, and measures have been taken as far back as 1997 (when the switch to "Plan B" was implemented) to remedy the problem.

"The town recoginzed over a decade ago how important it was to not include overtime into pension calculation," said Miron. "There's no question, that even to the most casual observer that looking at the overtime costs of firefighters and police officers who retire, it's alway's higher just before they retire. That's a broken system. It's not unique to Stratford. It's something that's existed for decades, and it's something the town recogized as a problem and started to fix, long before I was mayor."

Miron noted that one of the big achievements towards fixing the problem was the aforementioned switch from "Plan A" to "Plan B" for the town's police force.

"More than a decade later, that problem is becoming less and less," he said, due to the dwindling numbers of police officers that were "grandfathered" in on the Plan A plan. "Less than half of the force are now on Plan B, which doesn't allow them to use overtime for pension purposes. That's a good thing, but it's going to take a while more to get the officers who are eligible for Plan A to retire. Now once that happens all that's left is the Fire Department, and we are already in negotitions with their union to fix this," he said, adding that it's a difficult issue for all involved.

"Once you grant someone a right, especiacally on that was given to them long ago, you just can't unilatterally take it away; you're going to have to put something significant on the table for them to even consider giving that away," he said.

Though Mulligan, an alternative member of the board, was happy to serve, he felt the committee should have taken a harder stance against what he saw were clear abuses in the pension process.

"My own opinion is, the town council, the mayor, the town attorneys, the negotiators, the union's leadership, they all know exactly what they did," Mulligan said, adding, ..."3.12 mills goes to 572 people just because of bonding for the pension and investment shortfalls, and it's only going to go up."

©Stratford Bard 2008