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Board hears feasibility and bargaining issues for an eight‑year DROP and asks for payroll detail on proposed multiplier increase
Summary
Trustee and union representatives discussed extending the DROP from five to eight years; the actuary said it would show no immediate cost but counsel said pension changes are a mandatory subject of bargaining. The union asked for a payroll breakdown supporting a proposed 3.25–3.5% multiplier study.
At the June 9 meeting, members raised a request to consider extending the DROP period from five to eight years. The actuary said extending DROP to eight years would produce a no‑cost letter for an ordinance amendment (no immediate change to funding assumptions or city contributions) and that the change is legally permissible, but counsel cautioned that pension benefits are generally a mandatory subject of bargaining and any change would typically require negotiation between the city and the union.
"We would put no cost to extending DROP from 5 to 8 years," the actuary said, explaining he expected no immediate upward impact on the city's funded requirement and that a no‑cost letter could accompany an ordinance amendment. Counsel added that parties should verify labor‑law implications and that bargaining could be waived or expedited only by agreement of the parties.
Union representatives also requested more granular documentation for a proposed multiplier increase (3.25–3.5%); the actuary explained that the payroll basis used for the study was active firefighters contributing 6% and that the study was performed on the '23 valuation and should be updated using the '24 valuation for current figures. Trustees asked staff to return with a payroll breakdown and updated cost numbers.
No formal change to the DROP period or to member benefits was adopted at the meeting; board members were advised that any negotiated change would be handled through collective bargaining or by mutual agreement during contract negotiations.
