Sarasota Police Pension Plan Close To Major Changes

pension plan is one step closer to cuts to save the city money. 

The City Commission voted 4-1 Monday night to approve the first reading of an ordinance to modify a defined benefit plan. Commissioner Paul Caragiulo voted against the ordinance. 

The commission is able to institute the changes because the police union represented by the Southwest Florida Chapter of the Florida Police Benevolent Association,  following  It marked the first time in the 40 years of bargaining between the city and union that a contact was rejected unanimously. 

"This is too far of a reach," Sgt. Michael McHale, president of the Southwest Florida Chapter.

City leaders contend the changes will save the city $1 million a year.

A second reading of the ordinance is set for the commission's July 16 meeting. If approved, changes would be effective Oct. 1, the start of the city's fiscal year. 

Because police use a pension system, officers and the city do not contribute to social security. The change excludes officers eligible for normal retirement before Oct. 1, 2012, and they would fall under what would become the old pension plan where officers contribute 8 percent of their salary.

"The way the current ordinance is written, we will forfeit an estimate between $16 [million] and $40 million of the state premium tax money," McHale said, adding that insurance premium taxes would still have to be paid.

Caragiulo believes that a change in the system will come, but the proposed change is unfair.

"We've picked varying degrees of losers in this, and that's what I'm uncomfortable with," he said.

Here's what would change: 

• Cost of living adjustment on service before Oct. 1 would continue to be 3.2 percent and begin the year following retirement. The adjustment on future years of service will be reduced to 1 percent and begin at 65 years old.

• Average compensation paid out will be defined as one-twelfth of the officer's average salary of the highest three years of the last 10 years credited service prior to Oct. 1, 2012, or one-twelfth of the average salary of highest five years and the last 10 years of credited service prior to retirement, termination or death or career average as a full-time officer, whichever is greater.

• Overtime pay more than 300 hours in a calendar year will not be included from the calculation of salary for the benefits purposes, effective Oct. 1. 

• Benefit payment would change from 67 percent for a surviving spouse annuity to a 10-year certain and life thereafter annuity. Additional options are available with actuarial adjustments

• Members of the new plan will receive 2.5 percent annual interest instead of 6.5 percent. 

Diane Morton, attorney for the police union, contends that the police officers would appreciate to have a social security program if they were not going to have a pension program.

If the officers vote to participate in a social security program, if the union approves, it would be implemented following.

"What's the cost of that?" Morton asked rhetorically, noting that cost has not been shared in public.

That might be resolved soon, because the court recommended that would have to be done in the next bargaining session, which would have to come after the current contract is settled, according to a city consultant. 

Turner doesn't think the city could pay for a social security program for police.

"We're going to have to pay for that with other benefits," he said. "It's not like we're going to be able to provide this bare-bones — I shouldn't use the word bare bones — this alternative defined benefits plan and then also without other negotiated trade-offs, we're not going to be able to get social security."

Still, Turner argued that this new plan would be found in other departments across the nation in the coming years and is still better than what's offered in the general public sector.

"I'm confident we'll continue to be able to recruit," Turner said.

Morton also laid blame on former City Manager Robert Bartolotta for setting up the deal that led to an impasse and said the commissioners shouldn't be stuck with voting for it. 

"He charged almost more than a quarter of a million dollars in taxpayer money to have three lawyers do this," Morton said. "That's what the economic reality is."

Morton also speculated that officers would not retire at the first chance they have and work longer instead. 

Mayor Suzanne Atwell said it's important for the city to not stall with a contract and continue to negotiate about social security after a contract is approved.

This article corrects the name of the benefits plan being implemented.