Page 12 - March-2015-Life-in-Naples-Magazine
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STATETOHFECITY
THE CITY OF NAPLES AND PENSION REFORM
MAYOR JOHN SOREY T he City of Naples is opposed to Senate Bill 172 will result in extra benefits above the new higher minimum
and does not view this proposed legislation as for employees in the plan.
“pension reform.” This proposed legislation does
not meet the needs of taxpayers and local governments, 4. The proposed legislation is difficult to understand
does not promote sustainable retirement benefits for public and quantify. An accurate determination of bargaining
safety professionals, and is essentially the same as SB 246 alternatives may result in additional expenses to fund
considered last year. actuarial studies.
The City of Naples views this legislation as a step 5.The consequences of failing to reach an agreement with
backwards from the current interpretation of the a union prior to expiration of a labor contract are unclear.
When “mutual consent,” as provided in the proposed
Department of Management legislation, has not been achieved by the expiration date of
Services as stated in the “Naples a labor contract, does the default distribution of premium
Letter,” and does not view the tax funds occur, or does the “status quo”in the existing labor
legislation as advantageous contract prevail? The uncertainty may lead to expensive
to governments participating litigation.
in Chapter 175/185 pension
plans, nor to taxpayers in these 6. The proposed legislation, and “mutual consent”
jurisdictions. provision, limits the options of a local governing body when
imposing a resolution to an impasse in labor negotiations.
Naples is an excellent
example of how cities have been 7. The proposed legislation does not provide sufficient
able to address pension funding benefits for local governments that have relied on the
problems at the local level. The “Naples Letter” interpretation to bargain pension benefits.
City of Naples has reduced the
cost of pension benefits for all employees. Pension costs 8. The proposed legislation does not adequately address
payable by City taxpayers have been substantially reduced the unfunded liability of plans.
and it has been estimated that the City of Naples’ taxpayers
will save over $162 million in total pension costs over the 9. The proposed legislation places a burden on a
next 30 years. participating government whose employees are not
represented by a union by requiring the government to
OUR SPECIFIC OBJECTIONS obtain the consent of a majority of the “members of the
TO SB172 INCLUDE: fund.” It is unclear if “members of the fund” include active
employees, retired employees, or both.
1. The bill is a step backwards from the current
interpretation of the Department of Management Services The City of Naples has drafted proposed legislation
as stated in the “Naples Letter” to amend Chapters 175 and 185 of the Florida Statutes
regarding Firefighter and Police Officer pensions. Do not
2. The bill raises the required minimum benefit by be misled by this uncomplicated proposal, as it maintains
increasing the minimum multiplier from 2 percent to home rule of local governments, simplifies the statute, and
2.75 percent. While many plans offer a multiplier greater allows the parties to negotiate based on their needs and
than the minimum, this eliminates the flexibility of local desires. Please consider this legislation as an alternative to
governments in the collective bargaining process, and SB172. To summarize our proposal:
reduces the bargaining power of the public employer. • Eliminates the concept of “extra” benefits (extra cost).
• Maintains the current minimum benefit requirements.
3. The default distribution of premium tax revenues • Allows premium tax revenues to be used to provide
favors the union position. Failure to reach “mutual consent” benefits in a defined contribution plan and permits the
creation of a hybrid retirement plan.
• Clearly indicates that retirement benefits, employee
12 Life in Naples | March 2015
