The performance of the City of Warren firefighters pension fund received a harsh critique from the leader of the local firefighters union.
"A lot of problems seem to come back to the firefighters union," Andy Moore, president of the International Association of Firefighters - Local 1835, told city council during a budget special meeting. "There has been little to no action ever done to our pension" since its inception in 1974. "For many decades, the city firefighters pension was ignored."
Moore provided a history of the pension. He explained that the pension has been locked to 2-3 percent earnings through an insurance company while other pension plans were vested into some stocks, yielding percentages in the realm of 10-20 percent higher "because of the markets."
Citing that there have been two pension meetings between the union and the city between 1997 and May of this year, Moore alleged that "the city's administration again ignored the obvious points that were out there. The market was doing great." He informed council that the pension was not vested into stocks because a prior city manager informed him that he did not have the time to schedule presentations for alternate pension proposals.
He explained that in 2009 the pension was brought up to code. "We held up our end of the bargain" in negotiating the updates, Moore said. "City administration at that time decided not to do anything with it."
One key problem is the degree to which the pension is funded.
"Our pension is only 36 percent funded," Moore explained. "Across the state, the only one that is doing slightly worse than us is Allentown. (The) average (is) around the low 80s percentage." In Warren, the police pension is in the "high 90 percents" while the municipal employees plan was "allowed to move around (and is) in the 80s."
"We've been working as much as we can with the city to bring (the pension) into compliance with what others have across the state," Moore said, noting that the firefighters' hours and benefits are on par with the rest of the state.
"It never should have gotten to this," he added. "We don't want to make people feel the pinch from taxes."
City Manager Nancy Freenock acknowledged that the city will be required to pay more than the annual $130,000 into the firefighters pension. "There's nothing we can do about that," Freenock said. "The plan is underfunded. It's been underperforming. We've been looking at several other alternatives.
"If this plan were standing alone, it would be classified as distressed," she said, explaining that the state looks at all of the city's pensions in making that determination.
"Why is there such a discrepancy," Councilman Chris Park asked.
"(The) firefighters (pension) is a fixed income," council Vice-president Maurice Cashman said. "(The) other two are split - 60 percent stock, 40 percent fix." Cashman said that addressing the firefighters pension committee was placed on a to-do list for the previous city manager. "He never did it," he added.
"The place where we have the largest loss, it has to do with the management of the fund itself," Councilman John Lewis said. "Council needs to take the bull by the horns."