City pensioneers likely to get more money

Nearly 400 city retirees may get a welcome holiday surprise.
For only the second time ever, city leaders are poised to hand out cost-of-living increases to municipal retirees that will provide at least $10 a month extra. Some may get as much as $350 a month in additional pension money.
The move has the backing of the city’s Retirement Board and Salary Committee. It still needs the backing of the City Council, which is likely to come Tuesday.
Diane Ferguson, the city’s personnel director, said the hikes will add about $5 million to the payments that retirees receive.
Though it sounds like a lot of money, the city’s retirement trust funds, which can only be used to benefit former city workers, had $565 million at the end of October. That’s so far in excess of projected pension payouts that the city hasn’t had to put any money into the funds in years.
John Boi, a retired park worker who used to head the Retirement Board, said that the overfunding is so great that the increases can be paid out easily.
He said it will be “a big help for a lot of people,” particularly the oldest retirees whose checks are so low “they might as well be getting dust.”
The proposal that councilors will consider would add 75 percent of the annual cost-of-living increase to pension funds for each year back to 2002, the first time any pension hikes were given.
That means that workers who were retired in 2002 could get up to 16 percent more each month if the council endorses the idea. More recent retirees would get less.
City Treasurer Bill Veits said that workers who retired in 2005, for example, will get 5.58 percent more, or two years’ worth of cost-of-living adjustments.
There are 393 retired workers who will be affected by the change, officials said. Twenty two of them will receive the $350 maximum monthly increase while five will get $10 a month more.
Ferguson said the hikes are actually higher than the wage increases the city has given out over the same period.
She pointed out that the city is under no obligation to give retired workers an increase in their monthly pension checks, except for retired police officers and firefighters who negotiated pension cost-of-living hikes as part of their union deals.
Though the pension giveaway doesn’t cost taxpayers anything directly, it could in the long run change the financial picture enough to make it so the city would again need to put cash into the funds.
Councilor Cliff Block said there is a risk of that happening, but it appears remote.
“It’s a humanitarian thing to me,” Block said.
Veits said that the city doesn’t ever have to offer another cost-of-living hike if the money isn’t there in the future.
Councilor Mike Rimcoski said he’s not sure how he’ll explain his support for the measure to hard-pressed constituents but he doesn’t want to fight the move.
“I was told a long time ago to pick your battles and when you’re beat, admit it,” Rimcoski said. Still, he said, “I’m not a happy camper” about the plan moving ahead.
The chairman of the Salary panel, Councilor Frank Nicastro, did not participate in the discussion or vote because he receives a pension for his years as mayor and serving as a truant officer.

Change may have a fiscal impact
Though city pension funds are more flush than ever, and far better funded than nearly every other city in America, a new accounting necessity could change the picture suddenly.
To meet the new accounting standards, the city has to come up with $180 million to pay for a decade of health coverage for every retired worker – money that’s been promised but never set aside.
Officials are eyeing the pension funds as the easiest and perhaps best place to get the extra money that’s going to be needed.
Most everywhere, the money’s going to be raised by squeezing taxpayers.
But Bristol has another option, as officials are keenly aware, because it may be able to shift the pension cash into a health care fund for retirees instead, since the money would help the same people.The city’s pension funds have racked up twice what they need to pay out by investing wisely in stocks, bonds, real estate and more since starting the funds back in 1978.

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Copyright 2007. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com