Police pact ends 'spiking'

Omaha police officers would retire later and with smaller pensions but would have the security of a more stable pension fund. Officers would not get raises for two years but would have the promise of pay increases down the road.

Such is the give and take of the police union contract announced Wednesday by Mayor Jim Suttle and Officer Aaron Hanson, president of the police union.

With the pension changes, Hanson said, officers “will know they’re going to get their fair share of what they put in at the end of their career.”

Suttle said the new police contract would eliminate “spiking,” a practice that allows officers to boost their pension payments by working extra hours in their final years on the job.

The agreement “does a lot of things all in one package,” the mayor said.

The contract is subject to approval by both the police union membership and the City Council.

If the deal is approved, Suttle said, the city will take a major step toward addressing a long-term police and fire pension fund shortfall estimated at $500 million. The wage freezes for 2009 and 2010 also would help the city manage through a budget crunch.

Spiking has allowed some retirees to earn pensions that are higher than their base pay while working. Under the new agreement, pension payments would instead be based on an officer’s career average of overtime.

Hanson said the end of pension spiking should please both the public and the officers. He said officers will know that their pensions will be “based on blood, sweat and tears and time spent away from my family” and nothing else.

The agreement also includes a later retirement age — 50 instead of 45 — for new and midcareer police officers who want to receive full retirement benefits.

Tom Marfisi, the city’s human resources director, said he had not yet calculated the impact of the changes on individual police officers’ pensions.

The reduction in police benefits would save $13.5 million a year in pension costs.

Suttle said the city’s taxpayers also would have to come up with that same amount annually to help shore up the fund.

Suttle said the police agreement follows the recommendations of a pension task force created earlier this year by former Mayor Mike Fahey. The task force recommended that the city and employees each contribute equal amounts to shore up the fund — the city in the form of higher payments and employees in the form of benefit reductions.

The new contract also would lock in wage freezes for this year and next year. Officers would receive pay increases in 2011, 2012 and 2013 to bring their pay close to what police are paid in seven comparable cities.

Marfisi said Omaha’s pay for police officers was on par with those cities in 2008. For this year, police pay could fall slightly behind because Omaha froze wages while some other cities gave small wage increases, he said.

The city administration said Wednesday that it couldn’t yet predict what percentage increases would be required in the last three years of the contract.

The contract also would introduce a new supplemental retirement program, called DROP, or Deferred Retirement Option Plan, intended to keep veteran officers on the job longer.

Marfisi said the council would receive the contract in about a month and probably would vote on it by the end of the year or in early 2010.

“I’m certainly hopeful that both groups will ratify this,” Suttle said.

City Council President Garry Gernandt said now that negotiations are over, council members have to look at the proposal in depth.

“A lot of hard work has been done over several months,” he said. “I’m glad we’re at this point right now. I believe the council has to see the number lines” and review the figures.

World-Herald staff writer Tom Shaw contributed to this report.

Contact the writer: 444-3100, maggie.obrien@owh.com