The city should push forward quickly with plans to move excess pension fund money into a newly mandated trust account to pay for retirees’ health benefits, says freshman city Councilor Ken Cockayne.
“This fund is a huge issue,” Cockayne said, and crucially important if officials want to keep property taxes from rising in the years ahead.
“I’m worried about the taxpayers. That’s the bottom line,” he said.
Bristol needs to sock away at least $77 million during the next couple of decades to cover the health care costs that city workers are set to receive after they retire from government service. So far, it has a bit more than $1 million in the trust fund.
City Comptroller Glenn Klocko and members of the Board of Finance have already indicated they would like to pursue the possibility of dipping into pension trust funds that are flush with cash in order to pump some more money into the post-retirement benefits trust fund that new accounting standards mandate.
Cockayne said that city unions are fighting the idea even though the new fund will benefit the same people the pension funds do.
From Cockayne’s point of view, “union money is still being used for the union purposes” since the same people benefit either way.
Union officials have said they’re not necessarily opposed to the idea, but argue it has to be negotiated. They’d like to receive something in return for easing the burden on city finances.
Cockayne, a Republican who was elected in November, said that the unions are basically saying the city should have excessively funded trust funds for future pension payments while socking taxpayers to create a new fund.
“Why does the union have to always get something for doing something that’s right, for the taxpayers and city that is paying their pay?” Cockayne said.
He said he’s going to push hard on the issue despite the difficulty of opposing city unions.
“It might be an uphill battle since a few of the council members are union members,” Cockayne said.
The city’s pension funds have racked up more than $500 million – about twice what they need to pay out – by investing wisely in stocks, bonds, real estate and more since starting the funds back in 1978.
If the pension funds can also pay off the health care benefits, that’s a double savings for taxpayers that few if any communities in the country have the capacity to pull off.
Copyright 2008. All rights reserved.
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