By JOHN HOWELL
The Warwick Firefighters Union is contesting the Tier II pension plan implemented in 2012 to reduce pension costs and improve the city’s ability to pay pension obligations going forward. At the time the Tier II plan was proposed, actuaries forecast by the year 2049 the plan would save Warwick taxpayers $9 million a year.
While the Tier II pension system for new employees was approved by the City Council and enacted as an ordinance in April 2011, Joseph Penza, attorney for Local 2748 of the International Association of Firefighters, contends the ordinance does not apply and Tier II must be negotiated as part of the firefighters’ contract.
City Solicitor Peter Ruggiero counters that not only were representatives from the city’s municipal unions involved in discussions over the long-term viability of the city pension systems in 2011, but the firefighters did not follow protocols to contest the change and that an ordinance – city law set by its legislative branch and signed by the mayor – would take precedence anyhow.
“I am disheartened by the actions of the IAFF Warwick Local 2748 to undo the pension ordinance amendments proposed by me and adopted by the City Council in 2011,” Mayor Scott Avedisian said in an email questioning his position on the action of firefighters.
“The municipal and police locals have embraced the revised pension ordinances knowing full well they are necessary for the best interest of the city and their membership. Unfortunately, the action of the Warwick IAFF Local threatens these savings.”
The mayor called Tier II “a win-win for the taxpayers and the contributing employees,” adding that he is disappointed by the “about face” taken by the union leadership “will alter the good working relationship that we have had over the last 26 years.”
The issue of whether Tier II benefits could be enacted by law or required to be negotiated was raised when the plan was advanced in response to the escalating cost of municipal pension plans. All three of the city’s unions – fire, police and municipal employees – argued that pensions are negotiable by contract and that neither the mayor nor the council have the right to unilaterally change them. According to the April 7, 2011 Warwick Beacon, the administration countered that existing benefits defined by contract can’t be changed without mutual consent, but going forward to employees yet to be hired, the city has the power to define benefits as part of an employment contract.
At the time, members of the administration thought it possible that implementation of a Tier II pension plan by ordinance could be challenged in the courts. Nonetheless, the feeling was if the Tier I benefits were left in place for future employees the plan was unsustainable.
Bruce Place, City Council president at the time, reasoned, “It is time to draw a line in the sand,” otherwise future generations would be burdened with costs they can’t afford.
The firefighters are the only municipal union to challenge the Tier II system.
Since implementation of Tier II, 69 firefighters have joined the department, the most recent being 24 this past October. In addition, another 100 city employees come under the Tier II pension system in police and municipal employees.
Last May, the union filed a grievance contending Tier II was not a part of the contract. The city responded that the grievance and request for arbitration was “time barred” because it had not been filed within the time limitations set by the contract. In September, the union moved to proceed with arbitration and the city responded with a complaint seeking a temporary restraining order. The parties appeared before Superior Court Justice Jeffery Lanphear. The parties agree not to proceed and are now waiting for Lanphear’s ruling.
In its complaint the city states that candidates for jobs and successful applicants were provided detailed information on their rights and obligations to and for the pension program and that the union did not file any grievance following the hiring of firefighters in 2011, 2012, 2013 or 2014. Further, the city states that the union and city negotiated an agreement covering the period from July 2012 to June 2015 and that agreement was “ratified, pursuant to city ordinance, by the City Council and approved by the Local’s membership.”
The Tier I and Tier II plans differ in the time required to be eligible for benefits and annual living adjustments. For example, firefighters hired prior to July 1, 2012 are eligible to pension benefits after 20 years of service regardless of age. Tier II firefighters must be at least 50 years old and have 25 years of service to become eligible. Tier I benefits have a 3 percent per year annual cost of living adjustment, whereas Tier II are adjusted at 75 percent of the CPI, cost of living index, not to exceed 3 percent.
Penza said the union has “made it clear that it [the Tier II] had to be negotiated” since filing its grievance last May. He said the parties sought to resolve the issue with retired Chief Justice of the state Supreme Court Frank Williams acting as mediator. Penza said the union offered a compromise, which he would not detail, but that it was rejected by the city. No additional mediation sessions have been held.
In his brief to the court, Penza argues the grievance is the proper means to settle the issue and that arguments over whether the grievance was filed on time should be left to the arbitrator.
“The very arguments that the city seeks to present to this court,” Penza writes, “can be heard by an arbitrator.” Based on that reasoning and “for judicial economy” he asks for the court to deny the city’s requests and “rule that the matter proceed to arbitration and have the arbitrator decide the issue of timeliness as a threshold issue to the case.”
William Lloyd, president of the local firefighters’ union, said the city had not followed the state statute regulating the pension and that while the city and police had agreed on a Tier II plan in its 2012-15 contract that was not the case with firefighters. Asked why the union had waited so long to file a grievance, Lloyd said, “Nobody was harmed at that point.” He explained that when firefighters were charged for Tier II pension contributions they had cause for action.
Fire Chief James McLaughlin said recruits for each incoming class of firefighters were informed they would be in the Tier II pension system.