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Letter: Retired firefighter backs Rilling, says Moccia ‘violating promise’ to retirees

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By Frank A Peloso Jr.

To the editor

NORWALK, Conn. — In early 1977, I received a letter in the mail that I had very anxiously been waiting for. It was from the Norwalk Fire Department telling me that I was going to be appointed as a firefighter. You cannot imagine how thrilled I was. My dream was finally coming true.

Since I was a young boy, I had dreamt that someday I would be a firefighter. At that time, I had been working in construction for Norwalk Excavating Co. – a good job that actually paid more than my starting pay with the fire department. Even though I would be taking a $200 per week cut in pay, I did not hesitate to accept the new position. My starting pay at the time was around $13,000 per year. This was acceptable due to the fact that I would have excellent medical benefits and a pension to look forward to.

What brought me to write this letter was the fact that the current mayor is now gutting the benefits of retirees who are basically on a fixed income. No mayor has ever violated the city’s promise to the retirees until this one.

Some little known facts:

• Last year Norwalk firefighters were required to contribute 1.7 million dollars to their pension fund. Firefighters contribute 10 percent of their pay every year. This has increased from 7 percent when I was hired. The city does not pay into the fund every year. If the pension fund drops below 100 percent funded, it is not the fault of the firefighters. The city manages the fund.

• Each firefighter is required to pay over $3,600 per year for retiree’s medical benefits.

• When a retiree turns 65, his medical benefits are automatically shifted to Medicare, thus relieving the city of the bulk of the costs.

• A firefighter, when he retires, does not collect social security benefits. Even if he qualified for social security by working before he got on the job, or works a second job, he can only receive 30 percent of normal benefits.

For these and many other reasons it is imperative that when a firefighter retires, his benefits remain fixed in order to keep the quality of life that was promised to him and his family intact. It has been that way until this politician and his administration decided to come after the retirees.

It seems the current mayor has no regard for the promises made to the city’s firefighters, their families and the retirees. If he did, he would direct his administration, and his very expensive, high-powered law firm that has cost the city of Norwalk hundreds of thousands of dollars, to leave retirees’ benefits and their pensions alone. How can the mayor justify spending $16 million dollars for a new firehouse that has a kitchen that most restaurants could not afford, and forgive a $50 million loan for the Maritime Center while taking promised benefits away from retired people?

Firefighters dedicate their lives to a job that is both dangerous and demanding for them and their families. And then some politician that might be mayor for a few years is able to come in and take away all that you worked for and were promised. As shown above, a firefighter contributes to his own benefits through his entire career. It is not a gift.

On Nov. 5, the people will have a choice to vote for a new mayor. They can choose a politician, or they can change the mayor and choose a man of the people. He is a unique candidate due to the fact that he was born and raised in Norwalk, attended its schools, joined the police force, served as the police department’s union president, and eventually became its chief. Because of these facts he will have the ability to view all the issues as a citizen, a union official, a chief officer and, if the people of Norwalk do the right thing, as their mayor.

I have known Harry Rilling for over 40 years. Everything he has ever done he does with a passion for success. He will be fair but tough. He will make Norwalk a better place to live, work and retire. If the people make the correct choice, he will be Norwalk’s next mayor.

Please Norwalk. Help us keep our dignity. Vote for Harry Rilling

Frank A Peloso Jr.

Retired Firefighter

Comments

14 responses to “Letter: Retired firefighter backs Rilling, says Moccia ‘violating promise’ to retirees”

  1. M Allen

    Frank, as the son of a retired (now deceased) Norwalk Police Officer, I understand your issues with changing benefits. While I recognize the city has made many changes over the years to the benefits of retirees and their spouses, can I just ask one question: as a retiree, who represents you in the contract negotiations and who voted to accept those changes on your behalf?
    .
    I know that the city holds its fair share of blame when it comes to these changes, but does the union and its current membership hold no blame? Municipal employee unions, most notably fire, police and teachers have been signing away their post-retirement benefits for years in lieu of the here and now. When my father joined the force in the 1960s, the pay was low but the benefits were what so many police and firemen relied on to make up the difference. Given the physical conditions of the jobs, those future benefits were also very important. Yet time and again, shortsighted gains were allowed to chip away at the future benefits. And in the process, retirees get screwed with little to no say in the matter.
    .
    So again, what role do the current active members have on the changes you have witnessed to your post-retirement benefits? Are you as a retiree being properly represented by the union or are the young bucks giving away tomorrow’s benefits for an extra nickel in their paycheck today?

  2. John Frank

    I retired from the police dept as a captain a long time ago and Frank Peloso has it right. I, too, took a big cut in pay to become a police officer, counting on the benefits and job security to make it worthwhile. Sofar, the pension checks keep coming. They are not a gift. I paid into the pension fund, as required by contract, every payday. The City didn’t, and now they are dealing with a big “unfunded balance” and blaming us. I was forced to start using medicare at age 65 even though medicare was not part of the contract when I retired, and I have to pay for it every month.
    Harry Rilling is a good man and understands the impact changing the terms of a contract can have on retired City employees. He is a man of his word and I believe he will be a good honest mayor.

  3. John Frank

    M Allen (Matt)
    Your father was a fine officer and a good friend. As I understand, the City comes to the table with changes they claim they have to make, that are not negotiable, and don’t offer anything in exchange. Then they talk with union representatives about other things. Looking at the recent contracts, the City didn’t give away anything in exchange for higher pension contributions or changes in medical benefits. The City manages to hire some strange people as their negotiators (see separate stories on H James Haselkamp) and have done surprising well in arbitration recently. (pay freeze for teachers) Hard to blame young officers for recent City actions, not really negotiated in contracts.

  4. Daisy

    Dick Moccia’s the best friend you firefighters ever had – and you always knew it until Harry decided to run …. Same old same old – you think YOU should get all the money!

    (This comment has been edited to conform to our policy)

  5. M Allen

    Captain Frank – thanks for the kind words re: dad.
    .
    The city, under various administrations, has made changes to retiree benefits. I’m not trying to defend any side in this or say who would be better because I just don’t know. Pressure from the voters to control costs can lead to even the most pro-employee administration make changes it finds unpalatable, but necessary. What I’m really trying to reiterate is something many retired officers have long struggled with: retirees are bound by changes to the current union contract yet they have no vote and questionable representation. Most issues regarding the contract don’t affect them any longer, and it is understandable that active members aren’t necessarily focused on the retirees. I’m just wondering if the retirees are properly represented when it comes time to changing the benefits that do affect them. Retirees can’t just hope that the city plays “fair” or that the union is doing all it can. They should feel as though they are being fought for on an equal basis with the current members. But unless they have an actual seat at the table during negotiations, they are subject to failure by the city, the union, or both to protect thier interests.

  6. LWitherspoon

    @MAllen
    Interesting and thoughtful comment, as usual.
    .
    I agree that there must be more to this story than what is described in Mr. Peloso’s letter. What document governs changes that the City can make to the benefits it provides to its thousands of retirees? Hard to believe that it’s not written out somewhere.
    .
    I read Mr. Peloso’s letter twice and found no explanation of how the city is “gutting” and “messing with” retiree benefits. What exactly are the benefits that were promised that are not being delivered? Are we supposed to just take Mr. Peloso’s word for it that the Moccia administration is being unfair to him?

  7. Joe Espo

    Mr. Peloso: Here’s a brief synopsis of Norwalk’s financial state of affairs since the 2008 recession- realities we’ve had to live with. (From prior posts on NON):
    Annual revenues from conveyance taxes, building permit fees, recording fees and investment income plummeted from $15 million to $5 million. Cumulative lost revenue through 2012 was a staggering $40 million. The stock market tanked and city pension plans experienced significant losses. Since the city charter requires all pension plans to be kept actuarially sound, pension contributions increased from $2 million in 2008 to $10 million this year. That was a cumulative $18 million spending increase. On top of everything were double-digit increases in employee health care costs. The city has been working with department heads and its unions to find ways to keep property taxes under control, while increasing the BOE budget by 4.4 percent, which does not include the more than $2 million in the capital budget for new textbooks and technology.
    .
    What you, Mr. Peloso, and by extension Harry Rilling, are advocating is that despite loss of city revenue and the risk of levying confiscatory property taxes, the mayor should reverse the negotiated union concessions, lower the health care deductible, extend fully paid-for health benefits to retirees post age 65, and eliminate any employee contribution to the pension fund, among other things. This, I guess is what the police and fire unions mean when they’re looking for “respect” from Harry Rilling- and darn well expect it from him as payback for their endorsements if he’s elected
    .
    Just where are we going to get the money to satisfy you, Mr. Peloso, and live up to all the “respect” that Harry is peddling to the unions in exchange for endorsements? Guess you’re endorsing raising property taxes to satisfy your demands, aren’t you? That ought to make you a lot of friends, Mr. Peloso.
    .
    Those union endorsements should send shivers down any Norwalker’s spine and raise suspicion as to the motive behind the endorsements. In these times, an endorsement by a union is a demand placed on the candidate to raise property taxes. Plain and simple. And since most of the memberships, the NFT included, live in other towns and don’t pay Norwalk taxes, they couldn’t give a rat’s … if we pay more to line their pockets. Effectively, Harry is going to work hard to subsidize the tax base of other towns with Norwalk tax money.
    .
    Under Mayor Moccia, the Board of Estimate, the Board of Education and the Common Council have all done their part to keep Norwalk fiscally sound while city after city is going in the tank.
    .
    Look at Detroit. Detroit’s politicians made promises, and more promises, and more promises to unions to ensure their election and re-election. There was a lot of “respect” flowing their way. And Detroit’s confiscatory taxes are a testament to all that “respect.” That caused a middle class exodus to the surrounding towns to escape the burdensome city taxes, in turn causing the tax base to decline, in turn causing a death spiral of even more taxes, further exodus, and even further erosion of the tax base. Now Detroit can’t keep ANY promises and the remnants of all that “respect” can be found in the ash heap of municipal bankruptcy. Norwalk, on the other hand is trying it’s best to keep- safe to say- 95% of the “promises”, in the face of the reality of declining revenue. Everyone, including you, has to do their part in the effort to keep Norwalk fiscally sound and in a position to keep “promises.”
    .
    Do you live in Norwalk, Mr. Peloso? Because if you do, and Harry is elected, you and a slew of other retirees won’t be able to afford living here much longer because the promises Harry is making to the unions will surely cause near-double-digit tax increases and start a Detroit- like death spiral.
    .
    It’s clear that your plea is not made out of concern for the best interests of Norwalk’s citizens but made in the interests of your pocket, while taking from mine and our kids. Consider yourself lucky that Mayor Moccia’s sound fiscal management made it possible for you keep what you have these days. Ninety percent of us aren’t so lucky to have what you have.

  8. M Allen

    Joe, you have to understand the issues that many retirees are dealing with, and what I believe Mr. Peloso is getting at: for years, retiree benefits were unchanged. They were led to believe they would remain so and they planned accordingly. We’re not talking about the retirement pay. That was hard-wired based on the comp level at the time of retirement plus some COLA. What has changed, and this began long before Mayor Moccia came into office, were changes to the health plan. Retiree health benefits are tied to the current contract for active members. Therefore, whenever the contract changes, retirees are socked with the same changes. For active members, the plan may become more expensive i.e. higher co-pays, etc., but their incomes are also rising with time so this help to offset. In the case of the retirees, their pension dollars are fixed based on their comp level at the time of retirement, which may have been 10, 20, 30 years ago or more. So while their income level is generally fixed, their expenses related to health care are going up with each passing contract.
    .
    On top of this, retirees used to carry the city’s insurance as their primary carrier. Even if they had reach the age where they became eligible for Medicare, the city’s insurance was primary. That changed several years ago and the city required that Medicare A & B became primary. Now, I don’t know how much this truly affects the retiree because the combination of Medicare plus City plan should make it for very little in the way of out of pocket expense. But where some retirees are beginning to have an issue is that many doctors are beginning to stop accepting Medicare because it doesn’t pay enough. So retirees are being forced to find new doctors.
    .
    What they, and everyone need to understand is that a long time ago, the health benefits didn’t change all that much. Hence it created a perception that the benefits you retire with will stay the same. I don’t know if promises were ever made that said the benefits would never change, but I don’t see how a promise like that could be made, let alone kept. But another change that has come about for many retirees is that for some of the older set, their comp levels upon retirement were very low, even by the standards of the day. That is because back then, municipal employees were low paid, but benefits were outstanding. It was a tradeoff they knew and accepted. However, times changed and the need to increase wages came at the expense of decreases in other areas. If you were one of the ones who retired earlier, they never saw those pay increases but they felt every inch of the benefit reductions.
    .
    In the end, the biggest issue with retiree benefits is the issue of fixed income versus variable expense. Their income from the city is fixed based on a comp level from quite possibly a long time ago. While they no longer pay for cost of their plan, they do have rising costs associated with changes to the plan i.e. co-pays, deductibles, prescription costs, etc.
    .
    In my view, which I will freely admit has its factual limitations based on a lack of insider knowledge to negotiations between the unions and city, is that none of this is the result of any one administration. While I fully understand the difficulties Mr. Peloso and other retirees are describing, these changes began long before Mayor Moccia and are the new paradigm. No Mayor can promise the stars and follow through. At some point, taxation levels will come into play and the voters will get involved. If “respect” in its purest sense is what they are looking for, then that is possible. But if respect equates to dollars, there may end up being a lot of mismanaged expectations.

  9. M Allen

    And apologies for the long text above, but one other thing I wanted to point out from Mr. Peloso’s letter was the reference to the pension plans. Yes, they took a hit during the stock market collapse back in 2008/2009. This had no effect on retirees. They continue to get their checks as usual and the pension funds are unrelated to health benefits. But the increases that were put into effect for active members were also not related to the modest underfunding related to asset declines. As far as I know, the city has been making contributions to bring the underfunded status closer to fully funded. This doesn’t happen overnight and gains over the last couple of years have also helped to close the gap. The reason current members were asked to contribute more, from 7% when he was hired to 10% today, is just cost sharing for the ongoing plans. Even if the market hit hadn’t happened, the city would likely have asked for more from the members as a concession for something else.
    .
    With regard to the Social Security issue, this is in fact a travesty, but I think it is related to State law and not the city. I could be horribly wrong there. What makes it a travesty is that if an officer or fireman retires after 25 years at say, age 45, and then goes on to work another job for 20 years, he/she does not get the benefit of all of the money he and his future employer pays into Social Security. Social security payments are based on the last 40 quarters of income. Even if they work 40 quarters or 80 quarters, it doesn’t matter. They get their SS benefit discounted because they are receiving a government pension.

  10. Tim T

    This is truly unfortunate . However one would think the current union representation would to bat for the retires…But no as they are only concerned for themselves..Yet another reason unions are not good for America.

    1. Mark Chapman

      We reached out to the city to find out what the story is. Tuesday morning we will have a response to this letter from city Finance Director Thomas Hamilton disputing some of the facts.

  11. LWitherspoon

    @M Allen
    Thank you for those additional details.
    .
    While municipal employees don’t receive full Social Security, I believe they don’t pay Social Security tax either.
    .
    It would be interesting to know how the employee contribution to a pension plan compares to the amount of the Social Security tax that employers and employees in the private sector have to pay. Also, how much better is a defined benefit pension plan than Social Security? I’d wager the pension is significantly more attractive.
    .
    Most of the private sector did away with pension plans more than ten years ago, replacing them with 401ks. I understand the City has recently done the same for new employees. It will likely take a long time to realize savings from that move, but without a doubt it will save a lot of money for taxpayers down the road.
    .
    I tend to agree with those who say that “respect” isn’t really what municipal employee unions seek. Police and Fire Union members, in endorsing Harry Rilling, have often referred to specific complaints about salaries or benefits. This letter is just one more example.
    .
    Respecting municipal employees is easy, although respect is a two-way street. The recent comment in NoN by what appeared to be a Police Union member, in which he or she disparaged Norwalk and Norwalk schools, certainly didn’t help their quest for greater “respect”.

  12. M Allen

    @LWitherspoon – you may have misunderstood regarding municipal employees and social security. The net effect is that you’re right, if they don’t pay into SS then they aren’t eligible for SS. BUT, if they work for 10, 20 30 years after retirement from the government, and thus pay into SS over that time, in the state of CT (and 14 other states) they will be subject to a reduced SS benefit.
    .
    NY Times article speaking to the issue in Connecticut where it affects Police, Fire and Teachers.
    http://www.nytimes.com/2002/03/24/nyregion/noble-change-of-careers-can-be-costly.html?pagewanted=all&src=pm
    .
    Here is more detailed info from the Soc Sec Administration regarding the various provisions related to SS benefits for government retirees. The primary one is the “Windfall Elimination Provision” but another provision, known as the “Government Pension Offset” is related to spousal survivor benefits.
    http://www.ssa.gov/gpo-wep/

  13. M Allen

    @ LWitherspoon, I read a bit more of your comments again and just wanted to touch on the switch from defined benefit to defined contribution. Three things drove this change:
    .
    1. Transfer of liability from the employer to the employee – With a DB pension, the pension benefit is defined, hence Defined Benefit. Liability is on the employer to ensure they contribute, possibly along with the employees, sufficient money to fund the plan. On top of contributing, they must also manage the money to ensure growth over time in order to account for the future liability (the pension payment). By shifting to DC plans like a 401k, employers only had to define the amount of contribution they made. What the employee ends up with in the end is on them. Save too little or invest carelessly and their end result can be a horrible retirement. Do it right and it can be much more than a pension, but the liability is ultimately on the employee.
    .
    2. Reduction in Costs – The cost of running a pension plan can be steep as employer contributions tend to be much higher than DC plans and if the fund suffers asset declines, it is the responsibility of the employer to make up the difference. The costs of managing a DB plan are also higher. Most companies hire outside consultants for this purpose as their internal employees just aren’t in the business of running pension plans.
    .
    3. Portability – Here is the big benefit for the employee. Work for a company for 5 or 10 years and you probably wont leave with a pension. The employer contributions are just lost if the employee leaves. However, with DC plans, the money can be taken to their next job or used to fund an IRA. Even the empoloyer contributions can be kept by the employee as long as they have met the vesting time requirements, which are typically no more than 5 years for 100% vesting.
    .
    DB plans were the gold standard in security provided they were properly funded and managed. We’ve all heard the horror stories of underfunded pensions or plans that go bankrupt, but the vast majority worked very well for employees who stuck it out and earned them. But that was the catch. Switching jobs was just something you didn’t do if you wanted to earn your pension. DC plans have been around for a while, but the jury is still out on whether the average employee will ever save enough, or manage the money smart enough to provide for a healthy retirement. My money is on disaster for far too many retirees in the next 30 years. I simply saw too many people not save enough to get the job done. Or they invest their money haphazardly and end up with poor returns and little growth. One or both and you have seriously weakened your position and will be forced to rely on SS or working until the grave.

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