July 2014

Pew/Arnold Study on Metro Benefits Causes Confusion and Controversy

(Nashville)  Representatives from Pew Charitable Trusts caused confusion and controversy at a meeting of the Study & Formulating Committee when they revealed data about the Metro employee pension fund that conflicted with data presented by the city’s actuaries.

On multiple occasions, members of the Study & Formulating Committee attempted to get a straight answer from Pew representatives on the amount that Metro’s pension plan is funded at – a number which is crucial in determining if any reforms to the retirement system are even necessary. In a memo to the Committee on July 22, Pew/Arnold stated that Metro was funded at 77%, a number that was debunked by representatives from Bryan, Pendleton, Swats & McAllister, the independent actuary that serves Metro Government. According to BPS&M, Nashville’s open pension plan was funded at a healthy 85% (13% higher than the average state-level pension plan) in 2013. “I want to make sure we aren’t sounding alarms that don’t need to be sounded,” said Glenn Farner, one of the members of the Study & Formulating Committee, to the crowd in attendance.

“It is very disappointing to see an organization like Pew risk its reputation with this kind of fuzzy math in order to push an ideological agenda that puts the retirements of thousands of Middle Tennessee working families at risk,” said Doug Collier, President of SEIU Local 205. SEIU represents public employees in Metro government departments as well as Metro schools support staff, nearly all of whom are covered under Metro’s benefits plan.

Despite its credible name, Pew is partnering with the John & Laura Arnold Foundation to push a particularly dangerous plan to cripple public pensions all across the country. The Wall Street Journal identified Texas billionaire and former Enron executive John Arnold as one of the major forces behind efforts to cut worker pensions at the city and state level. Arnold, who was the subject of a Department of Justice investigation related to his work at Enron (including accusations of insider training and his role in wiping out the retirements of thousands of Enron employees) has funneled massive amounts of money to pension-gutting politicians and their super PACs. His foundation has also directed $4.85 billion to Pew Charitable Trusts’ “Public Sector Retirement Systems” project, which has produced anti-pension research used by state lawmakers to justify cutting into public workers’ retirement benefits, often replacing them with more expensive, less reliable and widely-discredited 401(k) plans or their newer cousin, “hybrid pension plans,” which bring with them hefty bank fees and unnecessary risk for seniors.

The Pew/Arnold work has been called “deceptive” by a host of state legislators in Kentucky after the organizations convinced the state of Kentucky to adopt a new “cash balance plan” which the legislators said “will cost taxpayers millions of dollars, will not reduce our state’s unfunded liability, and will diminish retirement security.” Pew also recently dropped into Jacksonville, Florida to provide policy recommendations addressing the city’s retirement challenges. There, Pew provided a flawed actuarial analysis that wildly overstated the Jacksonville police and fire pension fund’s problems. The city ultimately rejected Pew’s advice.

“It seems like everywhere Pew/Arnold goes, their recommendations are the same – to weaken the retirement security of public employees,” Collier said. According to investment research firm Morningstar, Metro Nashville was the seventh-highest ranked public pension fund in the U.S., with an ROI of 18.3% in 2013. “It ain’t broke, so there is no need for Pew/Arnold to try and fix it,” said Collier.

Another controversy plaguing the Study & Formulating Committee is its agenda. The current committee was formed by Mayor Karl Dean at the request of Metro Council members who asked the mayor to appoint a committee “specifically to consider the provision of domestic partner benefits,” according to a letter signed by 26 city council members on Oct. 2, 2013. “It was never the intent of the Council for this committee to be debating and discussing other employee benefits,” said Collier. “The city spent hundreds of thousands of dollars on an exhaustive study like this only two years ago and the changes that needed to be made were made. It is time for this current committee to be dissolved since their work on domestic partner benefits is concluded.”

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The Service Employees International Union is one of the fastest-growing labor unions in the U.S. with over 2.1 million members in North America. In Tennessee, SEIU Local 205 is chartered to represent thousands of public and private sector workers.

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Court Rules in Favor of SEIU vs. Metro Schools

Davidson County Chancellor Claudia Bonnyman sided with SEIU Local 205 in the union’s lawsuit against Metro Nashville Public Schools. The case began in 2011, when Director of Schools Dr. Jesse Register unilaterally “rescinded” a school board policy that had been in place since 2000 which, among other things, allowed school support staff to elect bargaining representatives (in this case, Local 205) and which required the superintendent to meet and confer to develop a Memorandum of Understanding.

Chancellor Bonnyman’s ruling on June 24 is the second time that a court has sided with SEIU on this issue, but MNPS plans to appeal the decision. “It’s ironic when we hear school officials, including Dr. Register, complain about how the state government is trying to take away local control of our schools when it comes to charters, but yet here is Register doing the same thing,” says Doug Collier, President of SEIU Local 205. “The Court clearly said – again – that Register did not have the authority to go around the school board in doing away with the Labor Negotiations Policy and we are wondering when the school board is going to hold Register accountable for thumbing his nose at both them and us.” While attorneys are currently waiting for Chancellor Bonnyman’s written order, her bench ruling indicated that the Labor Negotiation Policy is still in effect and that Dr. Register did not have the legal authority to rescind the LNP.

This is not the first time Register has been embroiled in controversy. In 2010, despite great opposition from the Metro Council and the community, Register ordered the layoffs of nearly 700 custodians and groundskeepers. As a result, hundreds of experienced, loyal city employees – mostly minorities – were sent to the unemployment line. Those that managed to get re-hired lost their benefits and saw their pay slashed. In 2012, Dr. Register was caught making disparaging comments about school employees while being interviewed on a local TV talk show when he thought the cameras weren’t rolling. Register also enraged parents and disability advocates when he laid off about 100 paraprofessionals working with special needs children. Also in 2012, Register was exposed in a front-page story by The Tennessean of violating his employment contract for not filing the ethics and conflict-of-interest forms that were required of him. That particular episode caused Mayor Karl Dean to publicly call for him to complete the forms and caused a Nashville-area state legislator to call for Register’s resignation or termination.

Local 205 also won a separate lawsuit in 2012 in which a judge ruled that support employees have the right to appeal their termination to the school board. That case was remanded by the Tennessee Court of Appeals for further litigation. “Despite the court ruling against them on that issue too, Register has terminated 19 support workers and displaced 49 others without affording them an independent hearing,” Collier said. “That’s another 68 working families being torn apart thanks to Dr. Register’s refusal to comply with court instructions.”

All of this prompted school board member Will Pinkston to issue a statement at the July 2014 school board meeting in which he said “this has gone on long enough… it’s time to cut our losses and chart a path toward more collaborative labor relations… this is a distraction.” To date, school board chair Cheryl Mayes, who is in a bid for re-election, has refused to add the issue for discussion on the school board meeting agenda. Pinkston has said that if Mayes does not bring the issue up on the agenda soon that he will be putting forward a motion for Register to abide by the Labor Negotiations Policy.

“Taxpayers should be asking the district to stop wasting money that could be spent in the schools on a legal defense fund for Jesse Register and voters should be asking school board candidates if they plan to hold Register accountable for his long history of defying the law and the courts,” Collier said. “All we are asking and all we have ever asked is for Dr. Register to acknowledge workers’ rights to have a union and to go by the policies that elected school members have put in place.”

You can read more about this story at The Tennessean.

 

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SEIU Negotiates to Prevent Layoffs & Protect the Contract @ Meharry

SEIU members working at Meharry Medical College in Nashville.

SEIU members working at Meharry Medical College in Nashville.

Local 205 recently stopped Meharry from cutting vacation accrual without bargaining with the union.

To avoid possible layoffs or deeper cuts, the union committee agreed to a one-year reduction. In exchange, Meharry agreed to no budget-related layoffs and committed to continue providing three additional personal paid days at the holidays. Meharry also agreed to continue contractual step raises and to not propose any pay cuts in wage negotiations that happen in November.

“With the support of our fellow members we were able to negotiate an agreement that protected jobs,” says Cory Cole, an electrician and union steward. “I cannot stress enough the importance of our union. They help give us a voice, and make our working environment a better and safer one.”

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