Reforms needed as pensions become outrageous

Last month, a Boynton Beach police sergeant got his job back despite being fired for allegedly viewing porn while at work. That isn't the outrage.

       As an arbitrator wrote, the city's case against Frank Ranzie was weak. The outrage is that Ranzie retired one day after his reinstatement and will collect a pension that is not only higher than his salary but much higher.

       Ranzie is 50. He spent 26 years with the department. As a sergeant, actually working for Boynton Beach, Ranzie made about $91,000. As a retiree, not working forBoynton Beach, Ranzie will make about $113,000. If he predeceases his wife, she will keep collecting that benefit, having done no work for Boynton Beach.

       With property values in South Florida rising again, city budgets are in better shape. Long-term, however, many cities still face potential financial crisis because of excessive, unfunded police and fire pensions. Last fall, Fort Lauderdale and the police union agreed to concessions that will save the city an estimated $161 million in pension costs over 30 years. But not all cities have made reforms.

       The crisis has several causes. Police and fire union endorsements can be critical in city elections. Winners respond by raising benefits. During the real estate boom, property values rose so dramatically that "paying" for those benefits seemed easy.

       The Legislature also had a role. State law allows cities to use money from a fee on insurance policies toward police and fire pensions. In return, cities must follow state rules for the money. Fifteen years ago, in return for the police and fire unions endorsing Jeb Bush, the Legislature required cities to spend that money on higher benefits, not shoring up pension funds in tough times.

       Cities have responded in several ways. Palm Beach took the extreme approach of abolishing its defined-benefit public safety pension plan and implementing a 401(k)-style defined contribution plan. Mass resignations followed, but the town council didn't budge. Other cities have put new hires into the state retirement systems.

       In most cases, though, cities have done what Fort Lauderdale did: negotiate with the union. That means negotiating all the entitlements that make public safety pensions much more lucrative than those in the private sector.

       For example, most fire and police pensions have annual cost-of-living adjustments that are fixed, not tied to the rate of inflation. Some police officers and firefighters can retire after just 20 years of service. State law allows police and firefighters to use up to 300 hours of overtime to calculate pension benefits. Some cities don't permit use of overtime. Boynton Beach does, which is how Ranzie can make more as a retiree than as a sergeant.

        Last March, Susan Haynie became mayor of Boca Raton after pledging to push pension reform. Sure enough, the city's contract proposal to the union includes many changes. Among them: no more use of overtime to figure benefits; using the highest two years of salary to figure benefits, not the highest five; a decrease in the cost-of-living adjustment; a reduction in the "multiplier," which with years of service determines the level of benefits.

       Delray Beach has yet to make its offer, but Mayor Cary Glickstein says the city must pay police officers more when they are working and less when they are retired. Meanwhile, the Boynton Beach City Commission this week approved an offer to the three police bargaining units that may end nearly a yearlong impasse.

       But Boynton's offer covers only wages. City Manager Lori LaVerriere sees pension reform as a new, two-year fight. Given the Ranzie case, failure to enact those reforms would be outrageous.