Fire Pension Plan Passes Senate and Passes House | Local News
SHERIDAN — After successfully passing the Senate last week, a bill stabilizing the state’s Fire A pension plan will make its way to the House floor.
Senate Docket 39, a product of the Wyoming Legislature’s Joint Appropriations Committee, passed the House Appropriations Committee in a 7-0 vote on Tuesday.
This follows a successful third reading of the bill in the Senate last week on a 28-1-1 vote. The bill was placed in the general record of the House.
Sen. Dave Kinskey, R-Sheridan, noted that the Fire A Retirement Plan grant had a significant cost to the state and participating cities, including the City of Sheridan. But he also said it was important that these entities “keep the promise” they made to local firefighters in 1935.
“The cost of it hurts – it’s a big bullet to bite into,” Kinskey said at third reading on Feb. 17. “…But the state and the cities made a promise…We’re stuck with (the pension plan), and it’s our job to fix it. If we don’t fix it this year and have to come back next year it will cost us another $10 million, so I urge you to uphold that vote.
The Wyoming Retirement System’s Fire A Retirement Plan is a plan for paid firefighters hired before July 1, 1981. All subsequent hires were placed in a Fire B Retirement Plan, which reduced benefits from Plan A. Plan A currently serves about 252 firefighters and their spouses, Sen. RJ Kost, R-Powell said, including 25 from the city of Sheridan.
In 1997, Plan A was deemed fully funded and the Legislature terminated all employee and employer contributions to the plan. With the dollars invested in the stock market, it was expected that the regime could sustain itself.
However, the fund started to run into trouble after the 2001 recession, when the plan fell from 147% to 95% in one year. The account experienced another major drop after the 2008 recession, when it fell from 106% to 84% from 2008 to 2009.
Senate File 39 generates about $154 million and fully funds the plan by 2043. The state will contribute $75 million to the pension fund. Of those dollars, $55 million will go directly to the pension plan, while $20 million will be loaned interest-free to employers who have employees who participate in the pension fund, including the Town of Sheridan. This $20 million will be repaid to the state over time.
Pensioners themselves will be affected by the removal of a 3% cost-of-living adjustment offered each year. The rest of the $154 million will be found through the allocation of a portion of state fire insurance premium taxes to the Fire A fund.
Currently, 100% of those dollars go to the State Volunteer Firefighters Pension Fund, which is 76% funded. The bill proposes that only 60% of taxpayers’ money go to the volunteer fund from 2022, with the remaining 40% going to the Fire A fund.
This delays the timeline in which the volunteer fund will be fully funded, and the volunteer fund is now expected to be fully funded by 2034. If there were no changes to the current allocations, it would be funded by 2028 .
At third reading in the Senate, lawmakers considered two potential amendments to the bill. The first requires waiting until the Volunteer Firefighters Pension Fund is fully funded in 2028 before money from taxes on fire insurance premiums goes to Plan Fire A. The amendment was sponsored by Kost , who wrote it in consultation with volunteer firefighters across the state.
Under this proposed change, the Fire A pension plan would not be fully funded until 2052.
Kinskey argued that the amendment did little except delay the eventual solvency of the pension fund.
“The dollars don’t change anyway,” Kinskey said. “What changes is which fund becomes solvent sooner… The difference being that the volunteers, with the proposed six-year time frame, are solvent by the end of the next decade. But that pushes Fire Plan A almost to the middle of the century… Both plans will become solvent, it’s only a matter of time.
Kost’s amendment was defeated by a vote of 10-19-1.
The second amendment, brought by Sen. Chris Rothfuss, D-Laramie, deals with any excess funds left in the pension fund after retirees have died. Rothfuss recommended redistributing excess dollars to plan employers. Sen. Larry Hicks, R-Baggs, argued that those dollars should go back to the state, since the state was already lending $20 million to employers.
Rothfuss argued that the state had no right to keep the money since it created the problem in the first place.
“I think (Hicks’ plan) would be reasonable, if it weren’t for the fact that the state caused all the problems we’re discussing,” Rothfuss said. “…The legislature and the state, through the pension system, created this whole problem: setting all the terms, negotiating all the rates, and failing all the solutions for 50 years. My city did not devote time to this negotiation. He did not choose cost-of-living adjustments. He didn’t set the terms of this particular deal… This legislature and the Wyoming pension system created this conflict that we are resolving today, not our cities.
Rothfuss’ amendment failed on a 6-23-1 vote.