Jacksonville (Fla.) Police and Fire Pension Fund might close to new hires later this year following approval from the city's police and fire unions of a proposal from Mayor Lenny Curry's office.
The $1.8 billion pension fund would close to employees hired on or after Oct. 1, 2017, based on the proposal, which was made by the mayor's office as the beginning of a process to comply with requirements established in a referendum passed by city voters Aug. 31. The referendum created a half-cent sales tax that will be used exclusively to fully fund the city's three pension funds.
Two separate proposals were drawn up for police and fire employees, but the common ground is that for existing employees, as of Oct. 1, the benefits will remain the same as before, except those employees who currently contribute 8% of their salaries will now contribute 10%. All other employees in the two unions currently contribute 10%.
Employees hired on or after Oct. 1 will be enrolled in a defined contribution plan. Employees will contribute 10% of their salary to the plan, and the employer will contribute 25% of an employee's salary to the plan. Employees will be fully vested after three years.
The local Fraternal Order of Police and International Association of Fire Fighters unions approved the proposals during the week of March 13.
“This represents another step toward solving Jacksonville's pension crisis once and for all in a way that is good for taxpayers, first responders and the future of our city. I want to thank union leadership and membership for working with me and reaching this historic agreement,” Mr. Curry said in an emailed statement.
Timothy H. Johnson, executive director of the police and fire pension fund, said in a telephone interview that the pension board was led to understand it needed to take some kind of action to approve changes to the plan, but the city's office of general counsel has told the board that in fact no action was required. Mr. Johnson said the board's attorney is preparing a response to the city.
The labor agreement is contingent upon the city council approving the changes by March 31, Mr. Johnson said.
The half-cent tax approved by voters can only take effect — once another half-cent sales tax used for infrastructure project expires — if the three city pension funds become closed to new employees and the employee contribution rate is increased to at least 10%, according to a state law that cleared the way for the referendum to occur. The other two pension funds are the general employees and corrections officer pension funds that make up the $2 billion Jacksonville City Retirement System.
Joey Greive, city treasurer and chief investment officer of the city retirement system, said in an earlier telephone interview that those pension funds will be addressed once the police and fire pension fund's closure is finalized.
Mr. Greive did not return phone calls seeking further information by press time.