Driving the 401(K)URRY

Is the mayor's pension reform plan a Peel Trident or a Ford Shelby?


We the people deserve an accounting of the costs to overhaul Jacksonville public workers' retirement plans before it's too late.

Right now, we're barreling toward the mayor's self-imposed March 15 deadline for police and firefighters to OK the deal that's on the table-and the taxpayers of Duval County are flying blind about how much his plan to "fix" our pension debt crisis is going to cost us.

Citing an exemption that allows them to withhold work product that results from collective bargaining sessions like it's some kind of state secret, and not a bill that you and I will be paying for decades, Mayor Lenny Curry's office has been mum on the price tag for his plan, which I've taken to calling the 401(k)urry.

Here's what we do know about the 401(k)urry: police and fire personnel are being offered one-time 3 percent lump-sum payments when the deal is signed, 20 percent pay raises over three years, a bump in pension benefits for current employees, and the city is to contribute 25 percent of the salaries of new employees who will all be enrolled in a 401(k) plan.

These are a lot of little numbers that together add up to a big, smelly, mysterious pile. We know it stinks, but we don't know exactly what's in it.

As the mayor is so sketchy about the specifics that he's started to look like a used car salesman, I've taken the liberty of making a few rough calculations based on what little we do know about the 401(k)urry and the city's proposed fiscal year 2017 budget.

Jacksonville Sheriff's Office
Salaries $195,647,581
+20 percent raise 39,129,516
+25 percent 401(k) contribution 48,911,895
Total   $283,688,992
(Actual FY2017 salaries + pension $317,558,569)

Jacksonville Fire and Rescue Department
Salaries 94,621,166
+20 percent raise 18,924,233
+25 percent 401(k)contribution 23,655,291
Total   $137,200,690
(Actual FY2017 salaries + pension $171,859,999)

As you see, it's easy to calculate how much it would cost if we were to give all police and fire personnel a 20 percent raise and enroll them in a 401(k), with the city contributing 25 percent of their salaries. (It also bears mentioning that we might be paying out a cool $8.7 million next year for that 3 percent lump-sum payment.)

Though these are not the true and complete costs of the 401(k)urry, because the raises are phased in and it will be decades before all those enrolled in the pension fund retire, these numbers are useful to help put the plan into perspective. And, quite frankly, it's the best most of us can do, 'cause unless we see the data, formulas and projections, such as actuarial tables, departments' retention rates, employees' ages, projected retirement dates, etc., it is impossible to know exactly how much this hoss is going to cost us.

Therein lies the problem. Without real numbers to work with, no one knows if this is financially responsible or if it is yet another way of slowing, but not stopping, the city's inevitable tumble off a fiscal cliff and into, say, bankruptcy. It is at least arguable that the 401(k)urry will ultimately cost the taxpayers less than we would pay if we just kept our current pension plan-the mayor does keep saying so, after all-but we don't have any way of knowing whether this is true.

This is why the Police & Fire Pension Fund board of trustees has been dragging its heels on signing off on the 401(k)urry. After taking heat from every direction for a cool decade or so, they're hesitant to sign on the dotted line without first learning if the contract will cause police and firefighters to be the reason we can't have nice things, like phased-out septic tanks and safe infrastructure (I can't be the only one who's literally waiting for the Mathews Bridge to come a-tumbling down), for another few decades. To be fair, PFPF is probably also not loving the idea of seeing their sphere of power slowly erode as their fund shrinks until, like the last drop of sunshine at twilight, it vanishes into darkness.

As to the former, who could blame them? Would you want to read headlines of the "Police and Firefighters Screw the City Budget ... Again" ilk for 10 more years? 'Cause one of the things we do know is that after the deal is inked, it's going to be extremely difficult to change the terms for up to a decade.

The Fraternal Order of Police voted to approve the 401(k)urry last week, so the next step is for the local International Association of Fire Fighters' votes on March 13, 14 and 15, and for the PFPF board of trustees to agree to certain of the deal's parameters.

Honestly, they'll all probably approve it. Lump-sum payments and 20 percent raises go a long way toward making a ‘no' into a ‘yes.' So in the end, we'll get the keys to a brand new retirement plan. Time will tell if the 401(k)urry is a lemon or a classic, but it'd feel a helluva lot better if we got to see under the hood before we drove it off the lot.

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A week is plenty of time to vet this deal provided you don't read the fine print of course. Thursday, March 9, 2017|Report this