Webster Groves, Missouri Fire Fighters Win Back Defined Benefit Plan
August 26, 2013 – It took dedication and a lot of hard work, but Webster Groves,
Missouri, fire fighters convinced the City Council to switch all city employees
back to a defined benefit retirement plan.
This local pension victory comes as elected officials in many states and
municipalities are trying to ditch defined benefit plans in favor of weaker
retirement options such as 401(k)s and cash balance plans.
By unanimous vote, the city council approved a resolution to discontinue the
defined contribution plan that it has had for 15 years through the International
City Management Association (ICMA) and replace it with a defined benefit plan.
Webster Groves fire fighters are represented by the Professional Fire Fighters
of Missouri Local 2665.
“This is a tremendous victory for our members there,” says Local 2665 4th
District Vice President Kurt Becker. “They were experiencing a lot of turnover
because fire fighters were taking jobs in other departments with better
pensions. Now, with the promise of a more financially stable retirement,
experienced fire fighters will remain in Webster Groves.”
In 1998, ICMA pitched the defined contribution plan to the City of Webster
Groves. Despite already having a healthy defined benefit plan in place, the City
decided to make the switch anyway.
“This move was especially bad for fire fighters because we do not pay into
social security,” explains Webster Groves Shop Steward Jason Simpson. “It is
nearly impossible to secure enough money for retirement with a 401(K)-style
plan. As a result, we had way too many guys getting stuck working past a safe
age because they did not believe they could afford to retire.”
A few years ago the Local 2665 leadership began working with the Webster Groves
fire fighters to devise a way to go back to a defined benefit plan. The strategy
included helping to elect fire fighter friendly city council members and
Then, many cities across Missouri began adopting defined benefit plans
through the Missouri Local Government Employees Retirement System (LAGERS)
[http://www.molagers.org/], a state government-created provider of retirement,
disability and survivor benefits.
The Webster Groves fire fighters put in a formal request with the City Council
to ask LAGERS to do a financial and actuarial analysis which was approved
without argument. The analysis compared the cost of the current plan versus the
cost of the two plans LAGERS offers.
The analysis concluded that the City could switch to the LAGERS L-6 plan with
little change to the budget. The L-6 plan requires both the City and its
employees to contribute into the plan and gives a 2 percent multiplier for each
year of service for those vested into the plan.
After the city employees and the City Council approved the change, all current
employees will now get credit for years of service.
Meanwhile, the fire fighters and the rest of the City employees are in the
process of upgrading to the L-11 plan which has a 2.5 percent multiplier. But
because that would cost more money, they must get voter approval to increase the
pension tax to fund the upgrade. The tax issue is expected to be on the November