Firefighters propose cuts

Our system is in its infancy and as time progress it is my hope that it matures and as I am not a numbers guy I leave it for those who have the responsibility to do it. I will say this, it disappointed me that while Buzz was on the Pension Board he had some what I believe were some valid questions as to the plan but as he decided to bail, I think it will be more difficult for those questions to be answered. What I do know of the plan is there are some very intelligent folks that have a fudiciary responsibility to the plan, NOT THE UNION. I feel the plan administrators who the Pension Board pay have a responsibility to the plan and the State has a certain amount of oversight, so to say I am concerned at this point no, but was hoping personally that Buzz would have stayed to get the answer to some questions he had.

Only over the short term. There's an inherent flaw in this type of system - the grenade goes off long after those who pulled the pin walk away. Examples are easy to come by in our current economic climate.

Hi Henry,

Well, all I can say is that the 100 hours was discussed by management many times during my tenure and the overtime problem was said to be directly related to the increase in hours, which many considered a raise that the admin staff did not get. I heard this time and again, so I couldn't help but think otherwise. All I am saying, is that if tough economic times were upon the District, I don't think there should have been raises or more time given, which again, time is money.

Have a good night!

Here are the key facts of this discussion in my opinion.

1. The plan has a $38,131,747 liability to its members as of 10/1/2010. That liability is over the life of the current plan members.

2. The fund had assets of $13,701,158 on 10/1/2010

3. The total actual accrued liability(TAAL) on 10/1/2011 was $21,707,011

4. The unfunded actuarial accrued liability (UAAL) on 10/1/2010 was $8,005,853. That means that the plan is currently $8,005,853 short of where it should have been on 10/1/2010. That 8 million is the 100% funded shortfall. Normal funding heath would be achieved at the 80% level. If we assume that the plan is healty at the 80% level then the acceptable UAAL would be $21,707,001 * 80% = $17,365,600.80.

That would mean that the asset value of the fund should be $17,365,600.80 rather than $13,701,158.00.

5. The plan was $3,664,442.80 short of the recommended 80% funded level.

The study lays out the needs to meet its total liability over the plan study period that would required either plan contributions from tax dollars or employee contributions or investment income in combination to provide that additional $24,430,589 dollars.

We should accept that the assumptions for investment returns and salary increases are valid and correct.

The unanswered questions are:

With the fund over 3 million short of its actuarial needs on 10/1/2010 what impact on the future required payments by the taxpayers will the FF union proposals of:

(a) A new plan benefit $600-800 dollar monthly stipend payable until the retiree's normal social security retirement age

and

(b) A new plan benefit allowing retirement at 80% of base salary at 20 years of service

and

(c) A new plan benefit of allowing a lump sum payment of 15%-25% of the actuarial value of the retiree's earned and accrued benefit at the time of retirement.

Those are substantial changes to the benefits and have tremendous demands made on the plan at a time that it is in a UAAL position of only 63%.

These seem like valid points to explore and legitimate taxpayer concerns.

Bear in mind that the current plan study has no provisions for additional firefighters/EMT's for the next 30 years. Which I find unrealistic with the projected growth in South Walton.

In the movie Jerry McGuire the phrase was "show me the money" in this case I say "show me the study" that answers these questions.

We should accept that the assumptions for investment returns and salary increases are valid and correct.

I agree we should be looking at the effect of future changes the union is proposing, but I disagree with this. Small errors in these assumptions can lead to very large differences in projected funding levels. These numbers should be based on historical averages. I haven't been able to get a hold of older actuary studies to confirm but based on this one report these numbers are not accurate.

I think it is clear that at a time when the district is in deep financial trouble no additional benefits should be added until a realistic plan to cover the plan's shortfall is developed. We owe both the taxpayers and the firefighters a plan that is fiscally sound for the future. To add additional benefits when the current plan is underfunded is reckless. I am afraid that at some date in the future the district will be faced with a plan that cannot pay its debt to the firefighters and a lack of tax money to cover the shortfall.

That is exactly the reason I say that you have to assume they are correct. Without proof that they are wrong you assume them correct.

That is exactly the reason I say that you have to assume they are correct. Without proof that they are wrong you assume them correct.

The current report shows these numbers to be inaccurate. I'm interested in using additional historical data to confirm what the current report shows. If we go based solely on the current report, then these assumptions should definitely change - the assumed salary increases are off, the fund return assumptions are off, and the administrative expenses are currently running ~55% above assumed expenses. With all these errors, my guess is once you dig into it you'll find more problems too.

I think it is clear that at a time when the district is in deep financial trouble no additional benefits should be added until a realistic plan to cover the plan's shortfall is developed. We owe both the taxpayers and the firefighters a plan that is fiscally sound for the future. To add additional benefits when the current plan is underfunded is reckless. I am afraid that at some date in the future the district will be faced with a plan that cannot pay its debt to the firefighters and a lack of tax money to cover the shortfall.

It's more than reckless - it's plum wack-a-doodle crazy! :lol:

That is exactly the reason I say that you have to assume they are correct. Without proof that they are wrong you assume them correct.

No, without proof something is correct, you assume it is incorrect.

Lack of evidence does not provide a conclusion.

I am a person that was trained to accept but verify.

In my opinion if and when we gain access to prior studies you will find that over the lifespan of the plan those assumptions on return and salary growth will be very close.

Two many variables have been introduced into this discussion whose only source was "someone" told me or I heard.

Perfect example is the 109 year lifespan. Once verified it proved to be inaccurate.

I am a person that was trained to accept but verify.

In my opinion if and when we gain access to prior studies you will find that over the lifespan of the plan those assumptions on return and salary growth will be very close.

Two many variables have been introduced into this discussion whose only source was "someone" told me or I heard.

Perfect example is the 109 year lifespan. Once verified it proved to be inaccurate.

Do you have any idea how we can make that happen? Are these studies public records?

Yes they would be subject to a public records request.

My CRM calendar has a pension board meeting this coming Wednesday at 1PM.

I cannot attend

If possible someone should ask the professionals who are in charge of the investments:

Why does the plan use Class R-1 shares with a higher annual expense ratio instead of Class A shares or other share classes with lower annual costs?

Can Class A shares be purchased with a commission waiver?

Has the fund made any attempt to appropriately diversify, specifically allocation to small-cap stocks?

I will make sure it gets asked.

It appears that the fire fighters have left the building

It appears that the fire fighters have left the building

Hope the fire's out.

:wave:Still here

Hi Henry,

Well, all I can say is that the 100 hours was discussed by management many times during my tenure and the overtime problem was said to be directly related to the increase in hours, which many considered a raise that the admin staff did not get. I heard this time and again, so I couldn't help but think otherwise. All I am saying, is that if tough economic times were upon the District, I don't think there should have been raises or more time given, which again, time is money.

Have a good night!

Diane, Sorry for the delay. I had a computer crash and I was out of town for the last weekend. I have not left the building. I am just pointing out that what you heard was the same thing we were being told at every meeting. It was not until we asked and then researhed the question that we got a better answer. It seems that what was really causing OT was that fact that we had two members on extended military leave, and one person on a leave of absense, another on medical leave and things like that. The contract does not count thoes people against the daily staffing.

As far as the increase, its a double edge sword. If you will recall and I am sure you read we were given 72 more hours a year but were also required to take 72hrs a year minimum. When we take a day off on PTO we then give up our overtime. This is something that seems to get overlooked. I hope you had a great Memorial Day and I hope all is well.

Since Bob Wells was the only person I know on here that was in attendance at the Pension Board meeting I am hoping he can answer any of your questions. I heard it was a good meeting, but since the 8pm start time is a little late for my family life I had to abstain from attendance. With that Bob, feel free to tell what was discussed about the investments and such.