As Contra Costa County supervisors prepare to close four fire stations, many question why they haven't curbed firefighter pension costs.
On Tuesday, Supervisor Karen Mitchoff declared that supervisors "have done everything we can on pensions."
It's an argument she repeats to address concerns from critics, including this editorial page, about supervisors' management of the Contra Costa County Fire Protection District, which serves much of Central County and Antioch, Pittsburg and San Pablo.
"There are no other legal methods for us to deal with pension issues," Mitchoff said.
She's wrong. First, supervisors have attempted only minimal pension change for firefighters. Second, they can do much more through collective bargaining.
Following recent voter rejection of a $75 annual parcel tax, supervisors must reduce pension expenses and more cost-effectively provide fire protection. If they start with the false premise that nothing can be done, they will never dig out of their financial hole.
Consider the numbers: A firefighter with paramedic training earns about $114,000 a year after six years on the job. That's before overtime. After 26 years of work, he can retire with a pension of $100,000 a year, which increases annually for cost of living. For a 31-year veteran, the starting pension is about $121,000.
A captain, who leads a three-person engine crew, earns $139,000 annually, and can receive a starting pension
It's a costly system. For each dollar of salary, the county contributes another 84 cents toward pensions. Firefighters kick in another 25 percent. It's in both sides' interest to find solutions. Here are places to start:
Implement meaningfully cheaper pensions for new hires. Current firefighters retire as early as age 50 with pensions equal to 3 percent of top salary multiplied by the number of years worked. Thus a 30-year employee receives 90 percent.
The county and firefighters last summer negotiated a slight reduction for new hires, but they did it in such a way that it required new state legislation, which never happened.
Instead, California lawmakers passed reductions statewide for new hires that change the multiplier for the maximum pension to 2.7 percent at age 57. But they provided an option for the county and firefighters to negotiate meaningful reduction of the multiplier to 2 percent. They should do so.
End pension spiking for all employees. Policies of the county and independent pension board policies enable some of the state's worst spiking, allowing employees to boost the salary on which their pensions are based.
The biggest problem is counting of unused vacation time as income. New state pension law ends that practice starting Jan. 1. But Contra Costa firefighters have joined a lawsuit against the pension board claiming they have an inviolable right to spike.
But there is no such protected right to the county's underlying generous vacation of up to seven weeks' annually, and accrual policies that allow employees to bank two years' vacation (one of which can be used for pension spiking). The county should end the spiking by replacing the vacation accrual with a "use it or lose it" policy.
Reduce future pension accrual rates for current employees. Conventional legal wisdom says the pension formula for existing employees can never be changed. Once a firefighter is granted the 3 percent multiplier, he is entitled to it his entire career.
To get around "vested rights," some public agencies have considered offering employees the option to a reduced future accrual rate in exchange for lower paycheck pension deductions. But the IRS has blocked such voluntary plans and attempts at congressional change have gone nowhere.
There's another option. Harvey Leiderman, attorney for Contra Costa's pension system, and others across the state argue that unions, on behalf of an entire bargaining unit, could give up vested rights in collective bargaining and agree to changes for future years.
Currently, firefighters' pensions are unaffordable and overly generous, and failure to act will mean more service cuts ahead. Those three changes could substantially reduce employer and employee pension costs. Something must be done.