A bill that would drastically alter the police and firefighter pension plan — and, officials say, avert a financial disaster for the city — won unanimous backing from a City Council committee Thursday, despite protests from union members.
The legislation, which consultants hired by the city say could save $400 million over five years, would delay the age at which employees could retire, increase their contributions and replace a benefit that varies with the market with a modest annual cost-of-living increase for retirees over 55.
Union members called the marathon hearing of the taxation and finance committee "a sham," and accused city officials of reneging on their promises to public safety officers.
"The City Council and mayor have turned their backs on police and firefighters," said Robert Cherry, president of the Fraternal Order of Police. "They should expect police and firefighters to turn their backs on them."
If the city does not change the terms of the pension plan by the end of the fiscal year on June 30, it will be forced to pay $166 million, $65 million more than officials have budgeted.
Union leaders filed a federal lawsuit last week contending that the city has underfunded the pension for nearly a decade and that changes to the pension violate their contracts. They said they would seek a court order to prevent the legislation from taking effect.
City Solicitor George Nilson told committee members the city is "more than prepared to defend the lawsuit" and that the pension changes do not fit the definition of a contractual obligation as defined by case law, in large part because they are crucial for the city.
Actuaries contracted by the city testified that the proposed bill would bring Baltimore's retirement plan in line with those of surrounding districts and other major cities.
The retirement of baby boomers is challenging municipalities nationwide. Baltimore, like many other jurisdictions, has considerably more retirees than active members, a reversal of the ratio two decades ago.
"Baltimore is not unique," said Mike Nadol, an actuary with Public Financial Management, the Philadelphia firm hired by the city.
But union members say the city's benefits are far from luxurious. The average annual payout is about $35,000 for retirees and about $13,000 for spouses of deceased officers. The city's fire and police officers do not participate in Social Security.
"We have a widow in Florida we just had to buy teeth for," said Nick Caprinolo, a trustee of the Baltimore Retired Police Beneficient Association. He appeared to choke back tears as he testified.
Don Helms, a former FOP president, warned that reducing benefits would prove doubly deleterious — leading talented officers to leave in search of better benefits, and making it harder to attract good recruits.
He said Baltimore would wind up with rookie cops who "go out and do stupid stuff" because of a "lack of experience and a lack of supervision."
Stephan Fugate, president of the fire officers' union, called the hearing a "fiasco."
"This was a done deal before we walked in today," he said.
Bob Sledgeski, president of the firefighters' union said, he was frustrated that the committee did not consider amendments proposed by the unions more seriously.
But committee Chairwoman Helen L. Holton said she had met with union officials several times in the previous weeks and that they had only produced the amendments last night.
She appended two amendments to the bill — one that would allow the annual 2 percent cost-of-living increase for retirees over 65 to begin in January, and one that would extend the same annual increase to younger members on full disability.
The measure will go to the full council for a vote Monday.
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