Zurik: Lawmakers target N.O. Firefighters Pension Fund - FOX 8 WVUE New Orleans News, Weather, Sports, Social

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 that could overhaul the New Orleans Firefighters Pension and Relief Fund. 

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

Pension fund CEO Richard Hampton and NOFD Assistant Fire Superintendent Tim McConnell are scheduled to have discussions with the State Ethics Board about those charges next month.  But before that meeting takes place, the make-up of the pension board could see significant changes.

Representative Kevin Pearson (R-Slidell) has filed four bills to change the board.  Pearson heads the 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 board members from 10 to five.  Right now, all but two board members are current or retired firefighters.  Pearson's bill would change that to one retired and one current firefighter on the board. 

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

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

Another bill changes the amount of money firefighters put into the system.  Right now, firefighters contribute six percent of their salary.  But after 20 years of service, they contribute nothing.  Pearson's bill would change that to a flat contribution of 10 percent for all firefighters  for every year of service.

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

We felt that it may be time for the firefighters to increase their pension contributions that would go directly towards lowering that overall unfunded liability," Hampton told us in a 2012 interview.   "And we're looking at some schedules to help come 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 funding firefighters' pension systems.

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

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

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

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

"It seems like they're not going to be agreeable at all and we're going 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 that the system, the way it's designed, is financially not sustainable. "

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

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

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

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