That proposal, unprecedented among major cities, shocked firefighters, union officials said.
Union president Randy Wyse said Curry’s proposal falls far short of recognizing the risk inherent in public-safety jobs, while the mayor, in remarks after the meeting, said the package of pay raises and investment accounts he put forward are competitive and responsible to taxpayers.
Wyse laid out a counter-proposal that would place future hires into the Florida Retirement System, which offers employees a pension or a voluntary investment account.
City negotiators flatly rejected that request, a quick dismissal that Wyse said was “almost insulting” and left him “very disappointed.”
The meeting ended without consensus on any issues of substance.
Both sides noted, however, that talks had only just begun and expressed confidence they reach an accord.
Wyse said the lack of a pension plan would make Jacksonville almost uniquely uncompetitive in Florida for public-safety jobs, and it would make the retention of talented employees nearly impossible. City negotiators said Curry was firmly committed to his defined-contribution proposals — a position the mayor reiterated later in the day.
“We need to get out of the pension business,” Curry said.
Police union officials meet with city negotiators Wednesday. They have also sounded skeptical of the 401(k)-style plans (also called defined-contribution plans) that Curry wants for future city hires.
The outcome of collective bargaining with the fire and police unions, as well as seven other city unions, will determine the retirement packages for future employees and the fate of Curry’s efforts to pay off the city’s $2.85 billion pension debt. Voters approved a referendum over the summer, which Curry backed, that gives the city the option of using a sales tax to pay down pension debt.
Before any sales tax money can be applied to a pension plan’s debt, however, that plan must be closed to new hires.
The mayor sees that as an opportunity to overhaul how the city has traditionally provided retirement benefits for its employees. Instead of using pensions — which place the risk of market downturn and poor investment performance on taxpayers — the 401(k)-style plans Curry wants would shift that risk entirely to employees.
No other major city has converted its entire workforce, including public-safety workers, to such plans.
Wyse was critical of the city’s desire to zero out its risk while firefighters can’t get out of the risk inherent in their jobs. He quipped: “If the city’s not willing to take risk, maybe we’re not willing to take risk.”
The Florida Retirement System is considered to be a well-managed pension fund. It also offers a voluntary 401(k) plan, but the vast majority of employees enroll in the pension fund.
Curry said turning employees over to the state system would abdicate the city’s ability to control its own destiny. Union officials said FRS is a desirable plan that would put the city on par with much of the rest of the state.
In addition to the investment accounts, city officials proposed a series of pay raises that equates to 14 percent over the next three years and a one-time, 2 percent lump sum payout.
Firefighters proposed higher payments, arguing that a past pay cut from 2010, combined with higher contributions to their retirements, should be taken into account. The sides did not come to an agreement on that front.
The union has also proposed a series of other changes that would effect the department’s existing employees. The union wants to claw back a few benefit cuts current employees took under a 2015 pension-reform agreement. At the time, because of a byzantine legal issue, the Police and Fire Pension Fund — rather than the unions — was negotiating benefits for police and firefighters. Apparently the pension fund agreed to steeper benefit cuts than the firefighters’ union was comfortable with.
City officials are weighing whether they to accept those changes, which would raise the cost of retirements for existing employees.
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