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Firefighters New Benefits

Firefighters New Benefits

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Board bill outlining the new benefit levels for firefighters.
Board bill outlining the new benefit levels for firefighters.

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Published by: St. Louis Public Radio on Feb 09, 2012
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02/09/2012

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BOARD BILL NO. 271INTRODUCED BY ALDERMAN CRAIG SCHMID
An Ordinance establishing the Firefighters’ Retirement Plan of the City of St. Louis; providingretirement, disability and death benefits for the firefighters of the City and their covereddependents, including severability and effective date clauses, and provisions pertaining to therepeal of Chapter 4.18 of the Revised Code of the City of St. Louis and the ordinancesreferenced therein, relating to The Firemen’s Retirement System of St. Louis.
WHEREAS,
in 1959
 
the City adopted Ordinance 49623, establishing The Firemen’sRetirement System of St. Louis, effective January 1, 1960, under the general authority of SenateBill 314, approved by the Missouri General Assembly.
WHEREAS,
pursuant to Section Fifty-five (55) of Ordinance 49623, codified in Section4.18.345 of the Revised Code, the City reserved the right to repeal the provisions of Ordinance49623 and the Firemen’s Retirement System at any time.
WHEREAS,
as a result of a series of amendments enacted by the state legislature andactions by the trustees of The Firemen’s Retirement System of St. Louis (“FRS”), the retirement plan originally adopted by the City has been transformed into an unsustainable system with manyunaffordable secondary benefits, which must be funded by City taxpayers but over which theCity has no influence or control.
WHEREAS,
the City is required to fund FRS to the extent investment returns and other revenues are insufficient to fund benefit obligations.
WHEREAS,
FRS incurred actuarial investment losses totaling more than $229 millionduring the ten-year period from 2001 through 2010.
WHEREAS
, during the same period of time, the City’s required annual payment to FRSincreased by 586 percent, from $3,365,007 to $23,072,000 (not including service of debtDate: February 10, 2012Page: 1 of 51Board Bill No. 271 Sponsored by: Alderman Craig Schmid123456789101112131415161718192021222324123
 
incurred to fund contributions).
WHEREAS,
the cost of funding FRS currently totals more than 56 percent of the totalfirefighter’s payroll, compared to 10.3 percent in 2001 (not including service of debt incurred tofund contributions), and approximately 12.7 percent of payroll to fund the pension plan for other City employees.
WHEREAS,
firefighter pension costs now consume nearly a third of the FireDepartment's budget;
WHEREAS,
these dramatic increases in FRS costs have created a severe budgetaryhardship on the City, which lacks the financial resources to sustain this level of funding withoutdrastically reducing other essential services, including services related to fighting fires.
WHEREAS,
service-related disability benefits under the FRS are more generous thanordinary retirement benefits and have become a significant expense that is ultimately borne bythe City.
WHEREAS
, the City is committed to funding the entire amount certified by the actuaryfor the plan each year.
WHEREAS,
given that there have historically been hundreds of applicants for eachopening for entry level firefighter positions in the fire department, the City believes it can attractand retain qualified firefighters, and maintain a pension plan that is very competitive in themarketplace, with a reduced level of contributions for pensions.
WHEREAS,
the City wishes to reform the current retirement plan for its firefighters, inorder to (i) assure that firefighters receive all benefits accrued and earned to date; (ii) makemodifications for future benefits in a manner that provides substantial retirement income benefitsat an early retirement age of fifty-five, typical for firefighters generally; (iii) maintain a pensionDate: February 10, 2012Page: 2 of 51Board Bill No. 271 Sponsored by: Alderman Craig Schmid1234567891011121314151617181920212223123
 
 benefit that is competitive in the marketplace that will attract and retain qualified firefighters;(iv) preserve the long-term financial sustainability of the plan and the City; (v) and reduce thefinancial burden on taxpayers funding the system.
WHEREAS
, for the above reasons, and others, the City has determined that it would bein the best interest of the City to replace the current Firemen’s Retirement System with a new plan.
BE IT ORDAINED
 
BY THE CITY OF ST. LOUIS AS FOLLOWS
:
SECTION ONE
. Pursuant to its authority under the home rule charter provisions of theConstitution of the State of Missouri, the City of St. Louis hereby establishes the pension plan prescribed in this Ordinance, known as the Firefighters’ Retirement Plan, as set forth as follows.
SECTION TWO
.
Chapter 4.19FIREFIGHTERS’ RETIREMENT PLAN
Sections:4.19.010Establishment of the Plan4.19.020Definitions4.19.030Eligibility and Contributions4.19.040Service4.19.050Retirement Benefits4.19.060Grandfathered Pension Benefits4.19.070Disability Income4.19.080Death Benefits4.19.090Limitation of BenefitsDate: February 10, 2012Page: 3 of 51Board Bill No. 271 Sponsored by: Alderman Craig Schmid1234567891011121314151617181920212223123

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