Mary Hansen
The State Journal-Register
The five-member Springfield Fire Pension Board failed to approve a motion Thursday to exclude holiday pay from pension calculations for current firefighters, with the three active and former firefighter members abstaining.
But whether the vote means anything is debatable. City officials on the board say it moves the dispute toward resolution, while the board’s lawyer contends it has little impact. Both sides agree a judge might eventually have to decide.
At issue is whether the double-time pay firefighters earn when they work a holiday should be included in pension calculations. The state Department of Insurance issued an advisory recommendation last year that the pay should be excluded, countering an opinion from the same agency in 1998. The pension board then approved excluding it for new hires, but has disagreed with the city on the right move for firefighters currently on the job.
“The resolution brought forth by the mayor, whether it passed or failed, wouldn’t have decided the issue, it was simply a statement of policy,” said board attorney Don Craven after the meeting.
Board member Bill McCarty, who is also the city’s budget director, had pushed such a motion in the past, but never got a second to bring it to a vote. Mayor Jim Langfelder, who is sitting on the board temporarily after city Treasurer Misty Buscher resigned her seat, supported the motion Thursday, and both McCarty and Langfelder voted in favor of it. But with the three abstentions, the motion failed to get the three “yes” votes it needed to pass.
Thursday’s vote could prompt action from the Department of Insurance, Langfelder said. The department could audit the board and issue an enforcement action instructing the board not to include holiday pay, he said.
In an effort to resolve the issue, Craven sought an opinion from the Sangamon County Circuit Court on how to proceed. But Judge John Schmidt dismissed the case in September.
“The Board’s failure to act and adopt a position concerning how to calculate double-time holiday pay deprives it of standing to bring suit for a declaratory judgment,” Schmidt wrote in his opinion.
The board has continued to approve retirement packages that include holiday pay, a practice city officials say is financially detrimental.
Once awarded, pension packages can only be changed for a short time. If the courts eventually rule holiday pay should not be included, the pension fund would have to continue to include the benefit in payments to retirees already receiving it. Whereas if the board excluded the pay and the court ruled it should be included, the board would have to retroactively pay the retirees.
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[McCarty] has said that including holiday pay for three recent retirees would cost the pension fund an additional $385,000. The estimate is worrisome for the city because the firefighters’ pensions are only 55 percent funded, while the state requires all municipal pension funds to reach 90 percent by 2040.
Ward 7 Ald. Joe McMenamin, who attended Thursday’s pension board meeting, said in an email, “The majority of the board is acting imprudently and contrary to the interests of Springfield taxpayers.”
Joe McMenamin for Ward 7 