Fort Smith set to trim pensions

FORT SMITH — Fort Smith police and firefighters who have worked for the city for years in hopes of enjoying their retirement looked on Tuesday night as city directors voted to cut their pensions in an attempt to avoid insolvency in their pension program.

“It feels like we’re being punished,” 11-year police veteran Barbara Williams told the city directors as they considered a resolution to downgrade pensions for police officers and firefighters.

The directors voted Tuesday to switch from Benefit Program 2 to Benefit Program 1 of the Local Police and Fire Retirement System in an effort to reduce the city’s contribution to the retirement program.

Under Benefit Program 2, Fort Smith would pay $6.4 million into the retirement system this year, according to city records. Of that, $1.57 million would come from employee contributions. The city’s share comes from multiple sources.

But the combined contributions are $1.2 million short of what the program pays out in retirement benefits each year. Without an infusion of more money, city directors have been told the pension program will be insolvent by 2019.

Going to Benefit Program 1 will reduce the city’s contribution by $450,000 a year, making that money available to apply to the $1.2 million funding gap, city directors were told.

But firefighters and police officers argued that they put their lives on the line for the good of the community and deserve better pensions.

Pay raises for police officers have been erratic, and that affects the pension amounts they ultimately receive, police Sgt. Daniel Grubbs told city directors on behalf of the local Fraternal Order of Police chapter Tuesday.

He said Benefit Program 2 uses a multiplier of 3.24 percent in calculating pension amounts. That number is multiplied by the number of years of service and by the maximum average pay the officer or firefighter received during his career.

Benefit Program 1 uses a multiplier of 2.94 percent.

Grubbs said the reduction in the multiplier is exacerbated by the fact that inconsistent raises prevent employees from moving up the pay scale and attaining the best maximum average pay. The only solution for the firefighters and police officers is to work longer to achieve the maximum retirement benefit.

Since firefighters and police officers don’t qualify for Social Security benefits, he said, they have to rely on their pensions in retirement or take on another job.

A chaplain for the Police Department, Robert Lever, told city directors Tuesday that police officers and firefighters deserve better treatment for the stress and danger they endure for the community’s protection.

“It’s not water parks and walking trails that make this a good place to live,” Lever said. “It’s what these men and women do. It’s a safe place to live because of what they do.”

While voting to reduce the pension benefits, city directors said Tuesday that they wanted to look for ways to cut spending elsewhere and apply that money to the pension contributions, as well as look for additional revenue.

Mayor Sandy Sanders chided city directors for passing up at least two possible revenue sources proposed last year.

Increasing the franchise fees for electric, telephone and gas services from 4 percent to 4.25 percent, and increasing the franchise fees for cable TV from 4 percent to 5 percent would have generated an estimated $554,000 a year. Reviving business license fees was expected to be able to raise $1.4 million more.

The city directors called for an evening meeting June 23 to continue the discussions on possible pension funding solutions.

NW News on 06/04/2015