New Orleans firefighter pension changes become law

Legislation aimed at steering the troubled New Orleans Firefighters Pension and Relief Fund toward more stable financial footing was signed by Gov. Bobby Jindal on Thursday.

The new laws, which started as House Bills 41 and 50, will hike the amount firefighters pay toward their retirement and change the makeup of the board that oversees the pension system as a way to rein in its massive debt.

The measures are far less ambitious than the plan pushed by Mayor Mitch Landrieu at the beginning of this year’s legislative session. Under that proposal, carried by Rep. Kevin Pearson, R-Slidell, the city would have taken full control of the pension system, a move Landrieu administration officials said was necessary to reverse poor investment decisions and generous benefits authorized by the existing board.

On the other side, firefighters and Rep. Jeff Arnold, D-New Orleans, pushed their own, milder package of bills. They argued the system’s problems stemmed largely from previous mayoral administrations that had failed to meet their obligations. They worried a city takeover would result in New Orleans ignoring court judgments won by the pension fund.

The proposals signed Thursday emerged as something of a compromise, though one tilted heavily toward the firefighters’ preferred outcome.

Under the plan, firefighters will see their contributions into the system increase to 10 percent of their salaries over the next several years. Employees with less than 20 years experience now pay 6 percent of their salaries into the pension fund while those who have worked longer now pay nothing toward their retirement.

The bill also changes the makeup of the board, which is now firmly controlled by active and retired firefighters. Under its new form, the board would include two active firefighters, two retired firefighters and three seats filled by appointees or employees of the mayor. Cost-of-living increases and other benefits granted by the board would require the approval of two-thirds of its membership, which would require firefighters to reach agreement with the administration on those issues.

A third measure passed this session, which would have had the effect of reducing the salary average used to compute benefits, is still awaiting action by the governor.