Obligations, Pensions and Millage (updated)

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In the September 10, 2015 copy of The New Orleans Advocate, there was a letter to the editor by Nick Felton, President of New Orleans Firefighters Association Local 632.  The letter is about how the City of New Orleans needs to make good on their obligation to the NOFD pension.  It goes without saying that a city’s obligations to public employees and public employees’ pensions are extremely important.  While these pensions have been demonized recently by some politicians around the country, the existence of these pensions for public employees is a significant inducement for young professionals to dedicate their professional lives to public service at wages below what they might be able to get otherwise in the private arena.   As I said above, pensions are extremely important for public servants.

Many who are not in public service (and some who are) are completely unaware of what is known as the Social Security Windfall Elimination Provision.  The Social Security Windfall Elimination Provision (WEP) significantly reduces the Social Security benefits of anyone who contributes to a public pension.  Police officers, firefighters, and teachers are all among the public servants adversely impacted by the WEP.  This underscores the importance of public pensions, particularly for those who have dedicated 30+ years to their communities and rely on pension payments to survive in retirement.

I encourage public servants to start their own Roth IRA or some similar type of investment to save for the future.  There are some interesting options available, such as Acorns, an iOS app which allows participants to automatically invest their spare change as they go through the day.  I use Acorns.  It works for me in the background, silently squirreling away spare change.

As important as this topic is, it is not the reason for this post.

Much has been made recently about a recent court decision holding Mayor Mitch Landrieu in contempt of court and threatening house arrest for his nonpayment of the debt owed to the firefighters’ pension not devising a plan to pay the firefighters their judgment in their longevity or payroll lawsuit.   The fact is that the City of New Orleans owes in excess of $34 million to over 500 plaintiffs in various civil judgments, as reported by NOLA.COM reporter Robert McClendon.  One of those debts it to the City’s police officers.

In 1980, Claude Schlesinger,  on behalf of the Fraternal Order of Police, filed an action in Civil District Court on behalf of New Orleans police officers for millage payments owed to our city’s police officers. The District Court found in favor of the Fraternal Order of Police and ordered the City to pay $3,376,740.00 to police officers for neglected payments between 1980 and 1994 and left the post-1994 amount owed open for later determination.  This judgment was finalized in 2000 and the City appealed the judgment to the Louisiana Fourth Circuit Court of Appeal.

A February 19, 2003 decision rendered by the Fourth Circuit Court of Appeals affirmed the decision of Civil District Court thereby upholding the judgment.   This judgment has been sitting around since 2003 accruing judicial interest and has not been paid to the police officers who were prejudiced by the actions of the City deemed to be illegal by the court.

This judgment needs to be paid.  Many of the officers adversely effected by this lapse have since retired and now live on fixed incomes or have had to get jobs to supplement pension payments.

The City owes it to all New Orleanians to pay this judgment before the judicial interest gets any larger.

There is a moral obligation to fund the firefighters’ pension.  There is also a moral obligation to pay the judgments to people wronged by the City.  The City wants to attract and retain police officers.  They are quick to point to that as a goal.  One good way to do that would be to make good on its debts.

Pay the millage judgment.

This post was revised on 9/12/15 based on comments received from NOFD personnel.  I hope that it is now accurate.  Ultimately, the message remains the same.

The comment I received follows:

You wrongly stated the mayor’s “house arrest” was due in part because he did not pay the funds into the pension system. That is not the case. He is held in “contempt” for not coming up for a reasonable payment plan to pay off the “Longevity Lawsuit” which I like to call the “Payroll Lawsuit” for layman terms, the City has lost. The City lost the pension lawsuit too, but these are two different lawsuits which the mayor is attempting to confuse the public about when he continues to tie the pension lawsuit to the longevity lawsuit.

You stated twice wrongly in your letter:

First, “The letter is about how the City of New Orleans needs to make good on their obligation to the NOFD pension.”

And secondly, “Much has been made recently about a recent court decision holding Mayor Mitch Landrieu in contempt of court and threatening house arrest for his nonpayment of the debt owed to the firefighters’ pension.”

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2 thoughts on “Obligations, Pensions and Millage (updated)

  1. I have been impacted drastically by WEP. I worked and contributed to Social Security as well as my employers from 1966 to late (Dec) 1987, when I signed on with the NOPD.
    When I retired from NOPD in August of 2012 I was 63. When I applied for SS benefits in 2014 at age 66, I was informed that because of my pension that I would receive reduced benefits. I inquired as to what happened to all the monies that were contributed on my behalf for over 21 years all I got was a smile and the comment that my pension was so great.
    I don’t know why so many active police work details that take out for SS benefits because it’s not going to help them when they retire.
    I heard that the national FOP has been working to overturn WEP for many years but so far with negative results.
    Who is really looking out for our best interests?

  2. The National FOP has been working on this problem for years and continues to do so. Unfortunately, Social Security is a topic that politicians like to talk about but refuse to do anything about. Every year there is a bill that would address this and it never goes anywhere. Politicians are afraid to mess with Social Security. We have been told that it is viewed as professional suicide for politicians. That being said, the National FOP continues to fight for Social Security reform. Every year, the FOP has a national Day on the Hill where FOP members from across the country meet in Washington D.C. I have had the opportunity to participate in this event. Each FOP group makes appointments with their elected officials to discuss matters of local importance and matters of national importance. WEP is always on the national agenda.

    This year, one of FOP’s top priorities was HR 973, the Social Security Fairness Act, introduced by Rep. Davis (R-IL). There was also HR 711 introduced by Rep Brady (R-TX).

    The FOP operates the Steve Young Law Enforcement Legislative Advocacy Center in Washington D.C. Jim Pasco is the Executive Director and leads our lobbying efforts.

    More info on the Steve Young Law Enforcement Legislative Advocacy Center can be found here –> http://www.fop.net/legislative/index.shtml
    The FOP’s Top Priorities can be found here –> http://www.fop.net/legislative/priorities.shtml
    The bills supported by the FOP can be found here –> http://www.fop.net/legislative/support.shtml
    The bills opposed by the FOP can be found here –> http://www.fop.net/legislative/oppose.shtml

    The National FOP was successful with legislation that exempted PSOB benefits from being classified as taxable income which is good for the families of our fallen heroes. However, the Social Security Fairness Act still lingers in what most politicians consider dangerous waters.

    You can support the National FOP’s legislative agenda, including WEP, by contributing to the NFOP PAC here –> http://www.fop.net/legislative/pac/index.shtml
    And by contacting your elected representatives. Contact information can be found here –>
    http://www.contactingthecongress.org/ and in other locations online.

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