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Metro Employee Pension Secured Thanks to Action by SEIU!

May 31, 2012

We are pleased to announce that some major threats to Metro employee retirement benefits have been avoided thanks to the direct action of SEIU Local 205.

What Happened? The Study & Formulating Committee, which has been closely examining Metro’s retirement, health insurance, and injured-on-duty (IOD) benefits released their report after months of deliberation and study of the employee benefit system.

What Did The Committee’s Report Say? Among other things, the Committee's report recommended NOT to make changes to the employee Defined Benefit plan, also known as “the pension”. The major change the Committee did recommend was changing the number of years that it would take for an employee to vest in the pension from five years to ten. As many of you know, the pension’s vesting period used to be ten years and was only changed in recent years.

“The current defined benefit plan platform for Metro’s pension system appears to still be well funded, managed and appropriate at this time,” the report said.  “We did not conclude that there was a financial crisis related to pension and benefits that warranted major changes in the system”.

How Did All of This Happen? Back in August of last year, the city's Finance Director suggested some major changes to be studied by the Committee, including requiring employee contributions and transitioning to a defined contribution plan. SEIU also proposed changes - all of them improvements - but the critical focus was for us to put the brakes on some of the Administration's more radical proposals. Which we did.

What Did SEIU Do to Protect Our Retirement? When Local 205 learned of Mr. Riebeling's proposals, the Union launched an aggressive education and political campaign. We hosted meetings in worksites all across Metro Government on a "Benefits Tour" to educate employees on the issues. The Union also collected hundreds of surveys from both union and non-union Metro employees asking their opinions on benefits. SEIU members made phone calls to Metro Council members expressing their concerns and we hosted a special Town Hall meeting as part of our ["Metro Muscle" campaign]( ""Metro Muscle" campaign") to have workers connect with their council member that was well attended and well-reviewed by both the members and the electeds.

When Local 205 learned that the Dean Administration was using a consultant to “study” Metro benefits, the Union had a benefits researcher do an analysis on Metro’s pension plan and give a presentation to the Study & Formulating Committee first. Ilana Boivie from the National Institute on Retirement Security ("NIRS") discovered that if Metro converted its system over from a pension to a defined contribution plan (like a 401k), it would actually cost the city more money than if they left the system alone. In a surprise move, the Administration's own consultants agreed with that assessment, forcing the administration to back away from many of their original proposals.

Is This Issue Settled? Yes. After the Study and Formulating report came out, the Benefit Board analyzed it and made its own set of recommendations, which were then sent on to the Metro Council for a vote. In the end, the most significant threats to Metro employee benefits have been stopped, but now employees must work for Metro for ten years until they are vested in the system - something that was the norm for Metro employees for decades. No benefits were cut and no contributions from employees will be required thanks to the work of SEIU Local 205 and the other public officials who have worked with the Union on this issue.