HomeMy WebLinkAboutResolution 71-06RESOLUTION
CONCERNING THE AMENDMENT OF THE POLICE AND FIREMEN'S
RELIEF ASSOCIATIONS GUIDELINES ACT OF 1969.
For several years prior to 1969 there was a growing realization
that the statutes governing the various paid police and firemen's
relief associations were in need of substantial revision. Relief
associations, acting unilaterally within rather broad statutory
limits had established exceedingly generous benefits, while
municipalities and the members of these associations contributed
only the relatively modest sums required by law. As a result the
actuarial deficits soared, jeopardizing the solvency of some of the
relief associations. Responding to what was viewed as a potential
crisis, the legislature passed t~e Guidelines Act of 1969 which
requires the affected cities to assume, over the next decade,
p~imary responsibility for financing the normal costs of pension
and other benefits established by the relief associations.
While we agree that responsible public policy demands that such
benefits be adequately financed and that forthright action had to
be taken to arrest the growing actuarial deficits, we believe that
there are at least three other considerations which must be
incorporated into the Guidelines Act if the public interest as well
as the interests of the employees are to be safeguarded.
The first is the need for substantial financial
participation by employees as well as public employers
in financing the benefits. The Guidelines Act which
requires the affected cities to bear in the order of
90% or more of the total current cost of the Benefits
is virtually without precedent in contributory public
pension systems and makes it virtually impossible to
negotiate any modification in the existing benefits
with their employees.
The second is the fact that public bodies, such as
City Councils, must have effective control over the
expenditure of the public funds for which they are
responsible. Yet the Guidelines Act did not modify
the statutes under which City Councils have no
effective control over relief associations either
on the level of benefits they adopt (or their cost)
or the administration of those benefits.
The third consideration is that City Councils need some
options or alternatives to enable them to work out with
the affected employees a level of benefits which is
acceptable to the employees and at the same time
constitutes a tolerable burden for the taxpayers. Since
the Guidelines Act provides City Councils with no options
or alternatives with respect to pension programs for
future employees, they are greatly handicapped in trying
to limit their financial obligations even on a long-
term basis.
The City Council of Columbia Heights strongly believes that these
three considerations must be incorporated into the Guidelines Act
of 1969 and urges the Legislative Retirement Commission and the t971
session of the legislature to enact the following specific amend-
ments to this Act:
The normal tevel cost of the benefits provided by these relief
associations should be shared by the employees and public
employers on the same 40-60 basis which applies to the P.E.R.A.
Public Safety Pension fund and employees should be permitted
the same ten-'year period (i.e., 1971 to 1980) as are
municipalities to achieve this minimum financing standard.
The Board of Directors of all such relief associations should
be composed of five members, two of whom shoutd be elected by
active members of the association, two appointed by the Mayor
with the concurrence of the City Council, and a fi. fth member to
act as chairman who would be appointed by unanimous agreement of
the other four. Some appropriate device should also be included
to resolve any impasse in the selection of a chairman.
Alt future changes in the by-laws of relief associations
affecting pension or other benefits should be subject to
ratification by the appropriate City Council.
The benefits by such relief associations should be limited
to that normal level cost which can be met by a contribution
by the public employer which does not exceed 35% of the
regular salaries of the affected employees plus the contributions
made by those employees.
Public employers should have the option of placing all police-
man and firemen hired in the future under P.E.R.A. public
safety plan and should also have the option of making
supplementary payments to such new employees not to exceed
the differential in cost between the employer contributions
to the relief association and the employer contributions to
the P.E.R.A. public safety plan. However, those supplementary
payments should not be considered to be a part of the employee
base salary for pension purposes.
IS
Passed this 8th day of February, 197t.
Offered by Heintz, seconded by
Roll Call - All Ayes
Secretary to the Council