Zurik: Lawmakers target N.O. Firefighters Pension Fund - FOX 8, WVUE, fox8live.com, weather, app, news, saints

Lee Zurik Investigation: Lawmakers target N.O. Firefighters Pension Fund for reform

File image of Pension Board CEO Richard Hampton (right) and other board members File image of Pension Board CEO Richard Hampton (right) and other board members

Lawmakers will consider a series of bills this month thatcould overhaul the New Orleans Firefighters Pension and Relief Fund. 

It's a fund that FOX 8 examined in our "Playing with Fire" investigativeseries. That investigation lead to ethics charges being filed against twomembers of the pension board.

Pension fund CEO Richard Hampton and NOFD Assistant Fire SuperintendentTim McConnell are scheduled to have discussions with the State Ethics Boardabout those charges next month.  Butbefore that meeting takes place, the make-up of the pension board could seesignificant changes.

Representative Kevin Pearson (R-Slidell) has filed fourbills to change the board.  Pearson headsthe House Retirement Committee.

"We have a system that's just in terrible condition,"Pearson told us.

Pearson's first bill cuts the number of pension boardmembers from 10 to five.  Right now, allbut two board members are current or retired firefighters.  Pearson's bill would change that to oneretired and one current firefighter on the board. 

Right now, if the pension board loses money on investments, theCity of New Orleans – taxpayers -- have to pay for the losses.

"We only have two people at the table out of nine," said NewOrleans Mayor Mitch Landrieu," People get to tell us what to do and we writethe check.  That's not a good place for thetaxpayers of New Orleans to be in.  We'vegot to change that."

Another bill changes the amount of money firefighters putinto the system.  Right now, firefighterscontribute six percent of their salary.  Butafter 20 years of service, they contribute nothing.  Pearson's bill would change that to a flatcontribution of 10 percent for all firefighters for every year of service.

The pension board has rejected our request for on camerainterviews.  But last fall, board membersindicated they would be in favor of some type of contribution change.

We felt that it may be time for the firefighters to increasetheir pension contributions that would go directly towards lowering thatoverall unfunded liability," Hampton told us in a 2012 interview.   "And we're looking at some schedules to helpcome up with making those changes."

The other major bill makes the pension system a local system,essentially handing control of it over to the city from the firefighters.  City Hall spends $30 million a year fundingfirefighters' pension systems.

 "If you just tookthat amount of money that we pay to the firefighters' pension," the mayor toldus, "it's the fifth largest department in the city."

Our series of stories last year focused on questionableethics by the board that lead to two charges. But we also highlighted questionable investments.  The fund put most of its money into realestate.  Experts questioned theirallocation of investments -- investments that underperformed the market.

 "Got a return on aninvestment last year that was less than zero," said Mayor Landrieu. "I mean,seriously?"

The city expects a fight in the legislature; they expectfirefighters to resist most of the changes.

"It seems like they're not going to be agreeable at all and we'regoing to have a big fight," said the mayor. "And yes, we've talked with them ‘til they're blue in face.  But they don't seem to accept the fact thatthe system, the way it's designed, is financially not sustainable. "

The sponsor of these bills says, whatever happens, currentand future firefighters will be paid.

"They're going to get their money," Pearson insisted.  "Current firefighters, they don't haveanything to worry about. The city is on the hook, the city is the ultimate backerof those benefits."

Another state representative, Jeff Arnold (D-New Orleans), alsohas a series of bills that changes the Fire Pension Board and raises contributions.  Arnold was unavailable for an interview.

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