Some retired firefighters find pensions not enough

Some retired firefighters and their widows struggle to live on pensions that have failed to keep pace with the cost of living.

Firefighter pensions are too low, and are less than retirement benefits other city employees receive, said Bob Stevenson, a retired firefighter and member of the Sedalia Fire Department Pension Board.

Stevenson said he would like to see the city contribute more to firefighter pensions and increase the benefit paid to retirees by 5 percent automatically on an annual basis.

The pension was set up to be close to the amount of firefighters’ wages, and increase by 3 percent annually if the fund was actuarially sound.
“It was set up where you could probably do pretty good. ... It would be your take-home pay almost,” Stevenson said. “If we would have kept getting our raises, it would have stayed pretty close to that.”

But pension payments have not increased by 3 percent annually, and they have failed to keep pace with inflation. It would take  $1.41 to buy the same thing today that $1 would have bought when Stevenson retired in 1995, according to the Bureau of Labor Statistics. His pension payments have not increased in a similar manner.

Stevenson said some years the fund could support a 3 percent increase, but the board was advised that if it granted the raise, the following year the account would not be sound.

Those drawing pensions have seen a 3 percent increase three times over 13 years, including in 2006 and 2007.

Stevenson talked to the council at a meeting May 5 about the problems with the pensions. City council members said they would like to discuss pensions at a work session.

City Administrator Keith Riesberg said he expects to have a report comparing pensions for workers throughout the city at the Tuesday work session.

Council members are “hearing bits and pieces of it, and they’d like to hear an objective overview so they can decide what needs to be done,” Riesberg said.

Third Ward Councilman Les Harrell, chairman of the Public Safety Committee, said “We’re waiting to see how that sorts out.” Harrell said he was interested in hearing more about the pensions to make an educated decision.

“When you have something that gigantic financially, you really need to know what’s going on and have a good handle on it,” he said.

Stevenson and other retirees are requesting the pension board hire an actuary to study whether the pension can support a 5 percent increase or how much additional money would be needed for the raise. Stevenson said he could take those findings to the City council. He would like the city to commit to paying the difference needed to make the pension actuarially sound to provide for the 5 percent raise annually.

“We went so many years without any 3 percent (cost of living increases), it would help us get caught up,” Stevenson said.

Widows of firefighters receive half of their spouses’ pensions, with some getting as little as $116 a month.

Anita Bunch, 69, of Ionia, said she struggles to make ends meet on the $267 she receives from the pension of her late husband and her Social Security benefit of about $730 a month.

“It’s not enough, I’ll tell you that much,” Bunch said. “With both the Social Security and pension, it’s about $1,000 a month. I just barely survive on that. It’s really not enough for a woman to live on without her husband.”

Bunch’s husband, J.D., worked between 20 and 25 years at the Sedalia Fire Department. Bunch worked, and her late husband also worked after retiring from the Fire Department. Bunch said she thought the pension would be enough to support them when they were no longer able to work.

Bunch said any increase in the pensions would help.

“I’d just like for it to be a little larger,” she said. “You have to cut corners. You can’t go to a movie or go anyplace unless someone else pays for it.”
Stevenson said he would like to see pensions for widows brought up to at least $1,000 a month. The cost of such a raise would also be included in the requested actuary.

Firefighters don’t pay into Social Security, so many receive little or no assistance from those benefits. Stevenson also said the city contributes more to other city employees through Social Security and Lagers, a retirement plan used for most other municipal workers.

As of March 2007, the city contributed 18.85 percent of the city workers’ payroll — excluding fire, police and the library — to Lagers, Social Security and Medicare. The Fire Department pension board receives 15.05 percent of that department’s payroll — 8.58 percent of which comes from the city and 6.47 percent is from a tax levy.

“It’s like they’re singling us out. All we want is an even contribution so it’s fair across the board. ... They need to put in the same amount as what they pay (other employees),” Stevenson said. “Then we would have the money we need to do what we need to do.”

Firefighters can retire after 22 years with the department, and if they choose to continue working, they don’t have to pay into the pension anymore. The board made that decision in 1999.

About 10 firefighters with more than 22 years of service no longer contribute to the pension. Those firefighters would contribute about $42,000 a year if they continued to pay into the pension. Stevenson said that difference “hurt some years,” but the board thought those who continued to work should be rewarded in some way because “he’s saving the pension by not drawing the pension.”

Also, firefighters should retire early because of the dangerous work, and many often have heart and lung problems, Stevenson said.