An Omaha mayoral candidate called for a delay in Tuesday's scheduled City Council vote on a labor deal with the city's firefighters.
The contract's forecasted savings to the city's police and fire pension fund rely on overly-generous financial performance assumptions, businessman Dave Nabity said Monday.
Nabity said figures from the city's Finance Department show annual returns for the pension fund have been between roughly 5 percent and 7 percent for the past 10 to 25 years. He said a financial analysis of the new contract's impact on the fund assumes an 8 percent return.
“What they are suggesting going forward defies the laws of financial physics,” Nabity said.
“In my opinion, this plan is going to fail.”
The candidate's comments came as council members — including Jean Stothert, another mayoral candidate and head of a council team that negotiated the new fire contract — are expected to support the agreement Tuesday.
Supporters of the labor deal have said it would put the city's troubled pension fund for police and firefighters on a path toward solvency.
The council agreement asks employees to contribute an extra 1.75 percent of pay to the pension fund, bringing the total employee contribution to a little more than 17 percent. The contract also calls for the city to pay about 33 percent of payroll toward the pension system.
Under the council's contract, the highest pension benefits would be awarded to current firefighters with 15 or more years of experience. Those firefighters can retire after 25 years on the job and earn pension benefits equal to 75 percent of their maximum pay.
Current firefighters with less than 15 years on the job can earn the same benefits after working 30 years.
The real savings come from lower pension rates for future hires. New firefighters would have to work 30 years to earn a maximum benefit of 65 percent of pay.
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