Gov. Scott signs landmark pension reform bill
Tuesday, June 23rd, 2015 @ 6:07PM
Gov. Rick Scott signed a landmark pension reforms bill negotiated between Mayor Ashton Hayward and the International Association of Firefighters Local 707, the city’s firefighters’ union.
The local bill, HB 1333, codifies the reforms announced last year by Pensacola Mayor Ashton Hayward. As Pensacola’s fire pension plan was established by Special Act, changes to the plan needed approved by the Florida Legislature.
The new contract with the firefighters’ union was the third pension reform agreement reached by Hayward, following the significant reforms negotiated with both the general employees’ union and police union in 2012.
“Taking action to get the city’s pension costs under control was a cornerstone of my campaign and has been one of my top priorities as mayor,” said Hayward. “I am proud of the progress we have made, and of the teamwork that made that progress possible. I want to thank both the Legislature and Gov. Scott for supporting our efforts to find local solutions to these challenges.”
HB 1333, sponsored by Rep. Clay Ingram, R-Pensacola, was approved by the Legislature in April, with the House voting 116-1 in favor and the Senate voting unanimously to approve the bill.
Hayward said that when he took office in 2011, the city’s unfunded pension liability — the difference between the total amount promised to retirees and the amount available to fund those promises — had ballooned to $116 million. Collectively, the reforms in all three agreements has allowed Pensacola to cut its annual pension costs and, coupled with improvements in market conditions, has reduced the city’s net unfunded pension liability to $74 million.
The reforms to the firefighters’ pension plan include a cap on the number of overtime hours considered pensionable and changes to the way in which final average earnings are calculated.
The agreement also conforms spousal benefits for new hires to those offered by the Florida Retirement System and reduces cost of living adjustments for future Deferred Retirement Option Plan, or DROP, participants and retirees.
In return, firefighters will receive a one-time bonus, with firefighters not enrolled in DROP also receiving wage increases spread out over the three-year term of the contract.
“These reforms would not have been possible without the efforts of many stakeholders working together over the past several years,” Hayward said. “I want to again thank the members of my Pension Advisory Committee, the union leadership, and our employees for coming together in a spirit of collaboration to face this issue. Cities across America are struggling with pension issues, but we are working together in Pensacola to find solutions.