The Professional Fire Fighters of Alabama (PFFA) is fully engaged in an effort to educate the public about the dangers of PEW Charitable Trust-influenced pension reform to eliminate the current defined benefit retirement plan and move to a cash balance plan.
PFFA Secretary-Treasurer David Harer, says, “We know that a cash balance plan will make retirement for our members nearly impossible, so we consider this our top priority.”
PEW Charitable Trust, funded largely by the John and Linda Arnold Foundation, has made attempts in several states to pass laws weakening public sector retirement systems. One of its most common pushes is to convince states to get rid of defined benefit plans in favor of a 401(K)-style plan.
PEW maintains the switch will not only save the state of Alabama money, but reduce retirement plan unfunded liabilities as well. But, in practice, the opposite is true.
In Alabama, PEW Charitable Trust successfully lobbied the state legislature in 2015 to create the Joint Committee on Alabama Public Pensions to study the Retirement Systems of Alabama (RSA). The RSA manages pension funds for fire fighters and other employee groups. About 340,000 employees participate in these plans.
The Committee recommended to the state legislature to implement a cash balance retirement plan for new employees. The plan, a 401(k)-style plan, does not include an employer contribution clause, among other things.
On the PFFA’s request, the IAFF reviewed the plan, noting several concerns. If approved, Alabama employees could see between a 35 and 55 percent reduction in retirement benefits – in addition to reductions created by Tier II benefits in 2013.
“Tier II employees [hired in 2013 and later] already have to work 36.5 years to reach the same benefit as a Tier I fire fighter receives after serving 25 years,” says Harer. “The cash balance plan would further reduce benefits, making it impossible for our members to retire until they are eligible for Social Security and Medicare at 65 or 70.”
Prepared to stop any attempt during the 2017 state legislative session to implement a cash balance plan, PFFA members are fully engaged in a public education campaign, which includes a “Save Our RSA” Facebook page, which has grown from 317 followers to nearly 64,000, and a Twitter page @SaveOurRSA.
In addition to social media efforts, PFFA Secretary-Treasurer Harer and Huntsville Local 1833 President Geoff Statum have crisscrossed the state holding town meetings about the PEW Charity Trust and the harmful effects of a cash balance retirement plan on employee benefits.
“The response has been overwhelming,” says Harer. “We had about 400 people at our first town hall held in Scottsboro and about 300 in Florence at our second meeting. And, we are getting requests from other municipalities to conduct more of these meetings.”
In response to the town hall, the Scottsboro City Council showed its support of the PFFA’s efforts by passing a resolution to keep the existing RSA Tier 1 and Tier II defined benefit retirement plan.
State legislators are also paying attention. Of Alabama’s 105 state representatives, 63 follow the Save Our RSA Facebook page, while 22 of 35 senators also follow the page.
The next state legislative session is slated to begin in February 2017. The PFFA plans to continue to work to solidify public support for maintaining a defined benefit retirement plan.