At issue | March 6 Tom Eblen column, "Gray has hit the bogs running, but deeper quagmire lies ahead"
I must take exception to the portion of Tom Eblen's column regarding the Lexington police and fire pension plan.
Eblen points out that this pension plan has always been underfunded, but goes on to state, " There are many reasons for that unfunded liability, but a big one has been very generous disability benefits."
I am not a forensic actuary, but I am a retired fire lieutenant and paramedic. And yes, I am retired on a disability pension.
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Eblen has gone after the low hanging fruit and has done little in the way of investigating, or so it appears. To infer that greedy cops and firemen have caused this unfunded liability is oversimplistic and inaccurate.
There are two overwhelming reasons for our unfunded liability. The Urban County Government has failed to put in its share and the stock market crash.
Defined benefit plans like ours are set up with the employer depositing a percentage each month, and the employees depositing a percentage each month.
For 30-plus years, almost every city administration has chosen, contrary to the recommendations of the actuaries, to underfund its portion of this pension plan. When the actuaries would report that the city must fund the pension at, for example, 19 percent and the employees (the cops and firemen) should pay 11.5 percent, the city would always choose to pay less.
"Well, it's been a bad year. Revenue is down. So, we will just put in 10 percent," seemed to be a common excuse used by the government, even in the few years of budget surpluses.
We, the police officers and firefighters, never had that option.
Compound this underfunding for decades and the results are staggering.
Then add in the stock market crash. That's where we are today.
Eblen goes on to compare the ratio of retirements on disability (42 percent) compared with other systems.
Do we have an issue that needs to be fixed with police and fire disability pensions? Yes, we do.
However, comparing Lexington to Louisville or to the County Employees Retirees System is not fair.
Under the current legislation, let's assume a Lexington police officer or firefighter has his pinky amputated at work. One would think that, with such an injury, you'd bandage him up and he would be back at work in a couple of days.
Not so. Under the current legislation, he is totally and permanently disabled.
Now if that same police officer or firefighter worked for another city and under a different pension plan, he would be back at work and not drawing a pension.
Our rules state that one must be at 100 percent. Anything less, and you are eligible for a disability pension. These rules need to be tightened. A minor injury, even one with a long-term impact, should be manageable and the employee returned to work.
Gutting this pension system is not necessary. Adjusting what qualifies for a disability is necessary and overdue.
A headline on the column reads, "Gray says he means business on police, firefighter pension system."
I hope the "business" Mayor Jim Gray refers to involves the city putting in its whole share, according to the actuary. Had previous administrations performed their fiduciary duties, Gray could have worked on other tasks.
Further, I do not support moving control of this pension plan from the state legislature to the Lexington government. History indicates the city would not handle it well.