Unions: Don't Believe Hype About Pensions

Chief Leader - December 21, 2010


Recent reports about generous Fire Department pensions make the benefits sound outrageous, but unions say that the numbers don't tell the whole story.

According to the city's Independent Budget Office, FDNY pensions are costing the city $1.05 billion annually. An article in the New York Post stated that nearly 1,300 FDNY retirees collect more than $100,000 annually. But Alexander Hagan, president of the Uniformed Fire Officers Association, says that the high pension costs stem from the attacks of Sept. 11, 2001 and their aftermath.

Rise in Disability Pensions

A total of 340 firefighters died on 9/11, and their surviving families were given a full line-of-duty death pension, as opposed to the 50-percent of final average salary service pension firefighters would receive for a regular retirement. Since 9/11, more than 2,000 Firefighters and officers have been forced into retirement with permanent disabilities. These retirees receive a pension worth three-quarters of their final average pay.

"While there may be some who look at this in terms of money streaming from the pension fund, I look at it in terms of pain and agony for individuals and families," Mr. Hagan said. "I don't begrudge any of them their pension because many of them aren't going to collect that pension too long."

When it comes to the high pensions that some officers receive, Mr. Hagan thinks the compensation may not be enough. "Officers lead the way into the building, every building. We lead The Bravest," he said. "Sadly, that may be an indication that the officer's job is far more dangerous than anyone ever realized, and perhaps the compensation needs to be looked at and adjusted accordingly."

'Fiscally Unsustainable'

Charles Brecher, executive vice president and director of research for the Citizens Budget Commission, said that it's not about a single catastrophic event, but legislation that pre-dated 9/11. "Our concern is the general set of policy decisions that have been made in the State Legislature that make the benefits fiscally unsustainable," he said. Those decisions include a definition of disability that CBC feels is too broad, the inclusion of overtime in calculating benefits, and no minimum age requirement for retirement.

But he doesn't think it's firefighters who are to blame. "Nobody is suggesting that people's existing pensions be reduced," he said. Instead, the business-funded CBC is focusing on changes to legislation to curb future costs.

There's also concern about city pension funds, which have suffered a 6-percent earnings shortfall over the last decade. But the City Comptroller's Office says that the funds have seen improved earnings in Fiscal Year 2010, at a combined rate of about 14 percent, with FDNY-specific funds performing slightly better. This is 6 percent above the assumed 8-percent earning used by the funds.

Uniformed Firefighter Association President Steve Cassidy noted that Firefighters contribute 2.85 percent of salary to the cost of those pensions. "Firefighters pay into their pensions for the 20 years that they're on the job," he said. "That's left out of many of the stories." He also insists that 9/11 had an impact on those funds. "And those in the CBC seem to forget that that [WTC] site was cleaned up a year ahead of schedule and saved the city over a billion dollars," he said. "So their whole analysis of the firefighters' pension fund is wrong. Firefighters risk their lives every day."

Mr. Hagan agreed that firefighters earn their pension in a dangerous and demanding job. "The risk to life, limb and health should also be taken into account," he said.