published Wednesday, February 19th, 2014

Chattanooga Mayor Andy Berke's pension reform plan faces more questions

Chattanooga Mayor Andy Berke
Chattanooga Mayor Andy Berke
Photo by Staff File Photo /Chattanooga Times Free Press.
Fire and Police Pension Fund Task Force Meeting
Fire and Police Pension Fund Task Force Meeting

Before the Fire and Police Pension Board votes Thursday whether to approve pension reform, officials will have to answer the latest barrage of questions on whether it's legal to alter officers' and firefighters' retirement.

A group of retirees and some active employees who have publicly protested Chattanooga Mayor Andy Berke's reform at City Council and at pension board meetings has hired a Nashville law firm. In a letter to the pension board, attorneys with the Agee Owens firm cite Chattanooga's charter and question whether the city can decrease benefits for vested employees who have worked for 10 years or more.

"Chattanooga's police and fire retirees have worked hard in exchange for the promise of a retirement pension," the letter states. "And it is illegal and unjust for the city to reduce that pension now."

Chattanooga's charter states that amendments to the pension fund "shall not in any way decrease any vested financial benefits accrued by any participant or beneficiary of the Fire and Police Pension Fund."

Attorneys Joyce Cooper and Lynn Agee argue this means retirees' 3 percent automatic cost of living adjustment should be protected.

But Fire and Police Pension Board attorney Bill Robinson said he and the city attorney's office have already reviewed the proposed reforms, which aim to eliminate a $150 million unfunded liability by reducing COLAs and raising employee contributions by nearly 40 percent. Attorneys believe the reform is legally sound, he said, and that Tennessee courts haven't ruled whether the COLA is a vested benefit.

During six months of meetings with Berke's handpicked 18-member task force, protesters have waved signs at City Council meetings and some officers and firefighters have angrily accused city officials of not listening to their concerns.

But union leaders and city officials defend the proposed reform and say most employees agree with the changes.

Another hurdle in the recent efforts to reform the pension has come from the state.

Earlier this month, state Treasurer David Lillard released a report on what he called deficiencies in 31 public pension plans that are not part of the Tennessee Consolidated Retirement System (TCRS) and calling for legislation to address them.

One part of the bill requires those cities to contribute at least 100 percent of the annual amount needed to make or keep the plans sustainable over a 30-year period. This doesn't affect Chattanooga's fire and police pension plan because the city already pays 100 percent of its contribution.

A provision that drew local concern would allow local government to hand over administration and/or investment of their pension plans to the treasurer's office. The plans would not become part of the TCRS and would still be under local rules.

Fire and Police Pension Board officials worried they might lose local control and board President Chris Willmore feared workers would lose employee representation.

Chief of Staff Travis McDonough says the city has no interest in allowing the state to administer its plan or invest its funds.

"We are committed with the reforms we've gotten a consensus on," McDonough said. "We think with these changes we're in good shape."

Today the pension board will hear from firefighters and officers for the last time before voting Thursday whether to approve the changes.

The board is expected to vote yes. But if it votes no, the City Council could vote to send the reforms to a public referendum. That's an option everyone involved in negotiations said they wanted to avoid.

Contact staff writer Joy Lukachick at jlukachick@timesfreepress.com or 423-757-6659.

about Joy Lukachick Smith...

Joy Lukachick Smith is the city government reporter for the Chattanooga Times Free Press. Since 2009, she's covered crime and court systems in North Georgia and rural Tennessee, landed an exclusive in-prison interview with a former cop convicted of killing his wife, exposed impropriety in an FBI-led, child-sex online sting and exposed corruption in government agencies. Earlier this year, Smith won the Malcolm Law Memorial Award for Investigative Reporting. She also won first place in ...

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