Two former town officials are urging the Town Council to act decisively to strengthen retirement benefits for the town’s non-union public safety workers.
They want to reverse a worrisome trend toward high employee turnover in the police and fire-rescue departments.
Former Mayor Jack McDonald and former council President David Rosow submitted letters to the Daily News for publication in advance of Tuesday’s council meeting. At 11 a.m., the council is schedule to discuss a study that found retirement benefits for the town’s public safety workers are not competitive with those offered in the majority of comparable departments in the local job market.
In his letter, McDonald urged the council to modify “disastrous” pension changes it enacted in 2012, when the council made deep cuts to a defined benefit plan for police and firefighters and created a companion defined contribution plan, creating a “hybrid” that has proven unpopular with the public safety workers.
Dozens of public safety employees have since left the town’s employment each year, creating a loss of experienced workers in both departments.
McDonald, who was mayor from 2005-2011, has appeared before the council and its Finance and Taxation Committee several times since March 2015 to ask for improved compensation, public safety pension revisions and good-faith negotiation of a contract with the rank-and-file firefighters, who are represented by a union.
McDonald said the study, done by consulting firm Mercer and funded by the Palm Beach Police Foundation and Palm Beach Civic Association, “provides the facts to support the necessary modifications.”
“The thought of 64-year-old police and fire personnel making traffic stops and entering burning buildings is discomforting,” he wrote.
When it made the changes in 2012, the council extended to 65 the retirement age for public safety workers while cutting a multiplier used, along with a worker’s salary and years of employment, to determine his or her pension payments.
Rosow, who was council president from 2009-14, noted in his letter that the pension cuts were made following the collapse of the stock market in 2008, and followed three years of study. The council said the changes were necessary so the pension plan would be sustainable over time.
Many other municipalities were faced with the same challenges as Palm Beach. “The council believed other municipalities would follow,” Rosow wrote. “No one did and we were an outlier.”
Rosow said it is time for the council to act: “When a decision is apparently wrong, it must be corrected.”
The most pressing issue is that public safety employees in other municipal departments have a defined benefit pension plan instead of the hybrid plan the town went to in 2012, and public safety employees don’t value a hybrid plan, Mercer’s report said.
Public safety employees want to retire at a younger age than general employees do, and they are willing to contribute a higher percentage of their pay to the town’s retirement system, a recent town survey found.
The 56-page Mercer report was presented March 30 to the council’s Finance and Taxation Committee, chaired by council President Michael Pucillo with Councilman Richard Kleid.
In response, Pucillo recommended lowering the retirement age to 56 instead of 65; boosting the multiplier to 2.75 instead of 1.25; and stepping up employee contributions to 10 percent instead of 6.47 percent (including 2.47 to the defined benefit plan and a mandatory 4 percent to the defined contribution plan).
Kleid supported Pucillo’s recommendations but wants the council to consider raising the multiplier even higher than 2.75, and making the retirement age younger than 56.
The changes proposed by Pucillo would apply to police officers and to non-union supervisors in the Fire-Rescue Department. The rank-and-file firefighters (who pay 4.82 percent into the system) are represented by a union so, legally, any changes to their pension benefits can only be done through negotiation, Pucillo said.
The committee requested more financial information about the cost of making changes and recommended the council hear that information at Tuesday’s meeting.
But Pucillo said that, if the changes are enacted by the council, the cost of the revised pension plan will be less than the existing hybrid plan. That is because the town would no longer have to put an 8 percent match into the employees’ defined contribution plan. “That’s over a half million dollars a year,” Pucillo said. “We could scrap that.”
Rosow said he supports the proposed changes before the council.
McDonald has said the beauty and other perks of living in Palm Beach are meaningless if the residents don’t feel safe. To feel safe, they need public safety departments that are second to none.
“What else is there to consider?” he wrote.