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POLC solves Burton Police pension crisis
— By Jennifer Gomori, POJ Editor
Burton Patrol Of cers were paying the price for a pension package which bene ted older retirees at a signi cant cost to existing employees. That is until the POLC stepped into contract negotiations. Burton Patrol Of cers walked away with signi cant pay raises and the assurance that the underfunded pen- sion would no longer be funded by them.
The 25-member unit, which had been represented by POAM since they rst unionized over two decades ago, struggled through contract negotiations in recent years that left of cers with depleting pay- checks and feeling hopeless. With a seemingly unsolvable legacy issue with their pensions they nally ended their relationship with POAM and voted to become POLC members in the summer of 2017.
“More than a year ago they decided to pick us as their new union. Immediately after the change, the City demanded to negotiate the patrol contract early and they were pushing for a reduction in pen- sion bene ts,” said POLC Labor Rep. Chris Watts. “Unfortunately, there were bad business decisions made in earlier years by both the City as well as the previous union. When the members switched from their old union to the POLC, the City felt this would be the perfect time to address the pension liabilities. We spent more than a year in negotiations. Ultimately, we did bridge the pension down.”
The change was necessary to maintain a stable working environ- ment for current and future Employees, Watts said.
“The older of cers had a Cadillac pension and we had the worst possible pension you could imagine. We tried to resolve the pension with the City and ended up taking it all the way to arbitration with POAM, but we lost,” said Local Union Vice President Mark Mahon. “No one in the past would touch the pension issues and it hurt the City nancially. At one point, we (the Employees) were paying up to 27 percent into that upside-down pension the older Employees had through MERS.”
PENSiON Fix
The new contract, negotiated by the of cers and Watts, bridges down the former De ned Bene t (DB) 2.25 percent multiplier to 1.5 percent. In exchange for the bridged down pension, Watts said, the City removed the age requirement of 55 years old as a term of retire- ment for current of cers. Upon rati cation, of cers hired prior to July 1, 2018 would be able to retire once they worked 25 years for the City. Those hired after July 1, 2018 will also have the 1.5 percent multiplier and 25 years of service requirement but must be at least 55 years old to be eligible for full retirement.
However, in addition to the pension changes, the Employer will pay 3 percent into an interest-bearing account (similar to a De ned Contribution (DC) Plan). The City will also place a $5,000 primer pay- ment into existing 457 accounts or new DC Plans, which shall be divided equally into each year of the contract. Wage re-openers
follow in years three and four of the contract.
“Under the old contract, patrol of cers also had no cap on their
Employee contributions,” Watts said. “With this contract, the City locked the Employee contributions at 10 percent. Three years ago, they were paying 27 percent. Additionally, the pay scale for patrol was condensed from a 10-year top out to a 5-year. Many current of cers saw large wage increases immediately, which they were not anticipating for several years down the road. We are hopeful the of cers will continue to move in a more positive direction in the future while they serve the Burton community.”
“We exhausted everything we could with the POAM. We tried something new and it turned out pretty well for us,” Mahon said. “I think it was win-win for the City and the police department. Basi- cally, Watts and the POLC have done for us what POAM hasn’t been able to do in 20 years. We’re not getting the Cadillac pension the guys from 20 years ago got, but we are not being held responsible for those legacy costs either.”
WAGE iNCREASES
The pension reduction enabled them to negotiate a major pay scale change from a 10-year to a 5-year top out. “Nobody wants to see a pension reduction, but ... we now have of cers getting a $5,000 to $6,000 raise in the rst year,” Watts said. “I think we’re going to be successful in the future bringing them up to one of best paid departments in Genesee County. They’ve been so stagnant — they had not seen a substantial wage increase for several years. In fact, they’ve gone backward. Every little bit of money afforded to them was being thrown back into the old pension.”
Effective July 1, 2018, the top pay for of cers who have served ve years at the department is $56,000, a $4,210 increase. Those in years one through four will receive about a $2,000 pay increase, Watts said. “We actually negotiated them a rather good bump in their pay,” Watts said. “Some of those patrolmen, who were not slated to top out for 6 or 7 years, are making a considerable amount of money right away. There were guys that only got a $2,000 pay step increase, but it was four years earlier than they expected.”
“One of the nice bene ts was I’m one of the older of cers and I received a pay increase and it was restructured,” Mahon said. “Now it’s a ve-year top out and that attracts a lot of new employees, which is a lot of better condition for the City. We’ve had a hard time recruiting new of cers because we were at the bottom of the pay scale for where we live. We have fought pension issues so long our wages basically froze,” Mahon said.
HOPEFuL, NOt HOPELESS
Their morale change is two-fold with Watts readily available to members and a contract that improves conditions for the police and Continued on page 16
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