The Longboat Key Town Commission approved a three-year contract with the Longboat Key Police Union at its regular meeting Monday. The agreement signifies the end of town pensions for new hires.
Town staff and the 11 members of the union reached an 11th-hour agreement in October on a new three-year contract that includes a pension alternative the town originally proposed in March, at the start of the stalled negotiation process.
“This is extremely important for our long-term financial sustainability,” said Town Manager Dave Bullock, who has also worked this past year to freeze pension plans for Longboat Key Fire Rescue and general employees at the commission’s request.
The contract includes a 401(a) retirement plan that includes a 3% pay increase and gives officers another 7% increase in take-home pay.
That’s because police officers currently invest 10% of their pay in an underfunded pension plan the town will now freeze.
As part of the proposal, the town will make a 10% contribution for each police department employee, even if the employee chooses to put none of his salary into the plan. However, if an employee invests a 3% contribution, the town will match that 3%, giving an employee a combined 16% total contribution to the plan.
The offer also comes with 2% cost-of-living allowance increases (or the same raises other employees receive) in years two and three of the contract.
Commissioner Jack Duncan called freezing the plan (the other two pension plans have already been frozen) “a huge burden that’s being lifted.”
“The hemorrhaging is finally going to come to a closure,” Duncan said, referring to more than $27 million in unfunded pension liabilities the town’s taxpayers must pay back over time. “The key element of risk associated with our pension program has been lifted, and it’s important our citizens understand and appreciate what’s happening here.”
Bullock said the town intends to freeze the police pension plan by the end of the year, or in early 2014.
Police Department Union 401 (a) offer
Town contribution: 10%
Employee voluntary contribution: 3%
Town match of employee voluntary contribution: 3%
Additional voluntary employee contribution: 7%
Total employee contribution: 23% of base wage*
* If the employee decides to make no voluntary contribution, the town will still make the 10% contribution and the employee will have 10% more gross pay to take home, plus the wage increases offered as part of the three-year contract proposal.
Contact Kurt Schultheis at [email protected]