Firefighter Disability Pensions – Part Two

Part One of this 3-part series  is HERE.

The Cooks In The Kitchen

It takes a lot of cooks to make a stew this unsavory. Some key players:

Pension Board Staff- Pension systems of any size will have a dedicated staff to manage operations, support the elected pension board and help plan members, both active and retired. While they generally should stick to implementing policy they obviously are extremely powerful in other areas as they know more about the day-to-day affairs than anyone else. Often they are hired by the same elected municipal officials who are responsible for the solvency of the fund. This may make them more inclined to see the management side versus the employee’s. In addition, they often oversee more than one pension fund (police, teachers, etc.) and thus may push for uniformity in benefits and other areas.

Elected Pension Board- Often comprised of a mix of elected employee representatives, management representatives and citizens. They make decisions or recommendations on investment choices and strategies, overall benefit levels and awards in specific cases. They are quite often bound by negotiated contracts, worker’s compensation statutes and other laws related to injured workers. Many of these individuals can have competing and conflicting loyalties that should be mitigated, but is often not, by their fiduciary responsibility to the fund they govern. To wit: occasional stories of elected members accused of various self-dealing schemes where they attempt to enrich themselves at the expense of others or engage in dubious travel and other activities.

Risk Management and Human Resources- These are management functions designed to control costs associated with injured workers and to either oversee a merit system for employees or to give the impression that one actually exists.

Attorneys- Everyone has them and that’s not necessarily a bad thing but it is a complicating factor as they are paid to represent the best interests of their clients and there are a lot of clients here. Generally speaking they favor the status quo and are likely to be a burden where reform is concerned.

Fire Chiefs/Commissioners/CEOs- Well, you know who these guys are but you may not know that they wield significant power over how individual “disabled” employees are handled. In many departments the “fair haired” are accommodated to a startling degree where others, sometimes deemed as less valuable or just a pain in the ass are given zero flexibility in terms of their choices.

Municipal Elected Officials- They are often ultimately responsible for the fiscal soundness of the fund and may be required to make up actuarial or investment losses by upping the employee portion or making direct transfer payments from the general fund. They can make decisions affecting retirements based on purely political motives that may be bad for plan participants. Since many of the decisions made by politicians around pension benefits only manifest their effects in out-years they require particular scrutiny because others may be left holding the bag, which very well may be empty.

Unions and Associations- In theory they represent the best interests of all their members but remember that they are elected officials too and may find it very difficult to make tough decisions especially if they want to be re-elected. They may not be particularly interested in reform especially if it involves lowering benefits in one area to balance them in another. There is little doubt that the current disability pension mess was created and fostered by both labor and management. The trick will be to see if there are any leaders in the house to get us out of it.

Plan Members- That’s you and me. We come in all stripes and colors from folks who simply want a decent, normal pension after a full career to legitimately disabled workers who deserve to be well taken care of, to others who may be classified as disabled because of poor policy, inertia and a lack of flexibility to a final group who are just out to scam the system.

Tomorrow: Ideas for Reform

Also on FireGeezer…

• Firefighter Disability Pensions – Conclusion – February 9, 2011
• Firefighter Disability Pensions – Part One – February 7, 2011