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From YouTube: Committee on Labor and Civil Services 11-23-2020
Description
The Committee on Labor and Civil Service of the Council of the City of Philadelphia held a Public Hearing on Monday, November 23, 2020, at 1:00 PM, in a remote manner using Microsoft® Teams to hear testimony on the following item:
200380 An Ordinance amending Chapter 22 800, entitled “Purchase of Credited Service,” of Title 22 of The Philadelphia Code, entitled “Public Employees Retirement Code,” to allow certain employees to purchase credited service for prior military service without the payment of certain interest for a certain time period, and to make technical amendments; all under certain terms and conditions.
A
B
B
Due
to
the
current
public
health
emergency
city,
council
committees
are
currently
meeting
remotely,
we
are
using
microsoft
teams
to
make
these
remote
hearings
possible
instructions
for
how
the
public
may
view
and
offer
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testimony
at
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hearings
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committees
are
included
in
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public
hearing,
notices
that
are
published
in
the
daily
news,
inquirer
and
the
legal
intelligentsia
prior
to
the
hearings
and
can
also
be
found
on
phl
counsel
dot
com.
I
now
note
that
the
hour
has
come
rachel.
Will
you
please
call
the
road
to
take
attendance
members
that
are
in
attendance?
B
F
B
B
By
continuing
to
be
in
the
meeting,
you
are
consenting
to
be
being
recorded
additionally
prior
to
recognizing
members
for
the
questions
or
comments
they
have
for
witnesses.
I
will
note
for
the
record
at
this
time
that
we
will
use
the
chat
feature
available
in
microsoft
teams
to
allow
members
to
signify
that
they
wish
to
be
recognized
in
order
to
comply
with
the
sunshine
act.
B
F
Thank
you
majority
leader,
parker
and
good
afternoon,
chairperson
parker
and
members
of
the
labor
and
civil
service
committee.
I
do
appreciate
the
time
to
make
a
brief
statement
on
bill
number:
two:
zero:
zero:
three:
eight
zero
I've
spoken
with
mr
dubo
and
mr
coghlan,
who
you
will
hear
testimony
from
shortly
at
length
and
I'm
aware
of
the
challenges
associated
with
balancing
the
two
policy
interests,
one
enhancing
benefits
and
two
increasing
the
pension
fund
systems
funding
levels.
F
Generally
speaking,
when
we
improve
or
enhance
benefits,
we
move
further
away
from
a
fully
funded
pension
system
that
you're
aware
well
we're
well
aware
of,
and
I
want
to
commend
a
pension
board
and
mr
devoe
for
their
work
and
their
leadership.
With
regards
to
funding
our
pension
system.
That
said,
allowing
service
members
to
buy
their
years
of
service
without
interest
isn't
a
new
concept.
F
We
offer
this
benefit
in
1999
city.
Only
107
city
employees
took
advantage
of
the
opportunity.
At
that
time.
You
will
hear
from
mr
coughlin
that
it
is
possible
that
offering
this
opportunity
now
may
encourage
and
spark
an
interest
of
early
retirement
dates
and
or
a
member
of
our
fire
department
and
or
other
city
departments,
to
retire
as
a
result
of
transferring
assets
from
our
deferred
income
fund
to
our
pension
fund,
which
will
move
our
pension
fund
closer
to
100
percent
funded.
F
Secondly,
I
want
to
address
something
that
you
will
hear
in
mr
dubose
testimony.
He
states
that
he
believes
that
the
benefits
for
representing
employees
should
be
bargaining
for
and
in
most
cases
I
agree.
I'm
steadfast.
I
am
a
steadfast
advocate
for
preserving
the
sanctity
of
collective
bargaining
process
and
wherever
possible,
I
believe
represented
workers
should
organize
and
use
the
power
of
the
bargaining
progress
process
to
accomplish
their
goals.
F
But
I
also
believe
that
there
are
certain
benefits
that
we
should
offer,
regardless
of
whether
or
not
they
are
bargaining.
Military
service
has
historically
been
honored
and
recognized
and
rewarded
in
the
past
city
workers
who
serve
and
have
served
their
country
in
the
military
made
incredible
sacrifices
that
made
it
possible
for
us
to
sit
here
today.
F
Although
I
am
not
asking
this
committee
to
amend
or
remove
this
bill
out
of
committee
today,
I'm
asking
that
the
administration
and
the
pension
board,
especially
the
firefighters,
mr
coughlin,
here
today,
to
evaluate
the
legislation
in
detail
and
consider
other
ways
to
support
service
members
in
the
fire
department
and
across
our
city
workforce.
So,
madam
chair,
I
thank
you
for
your
time
and
I
thank
you
for
this
opportunity.
B
B
E
Okay
thanks,
okay,
good
afternoon,
chair
parker
and
members
of
the
committee,
I'm
rob
dubo,
I'm
service
finance
director
and
I'm
here
to
testify
against
bill
number
two
zero
zero
three
eight
oh
bill
would
allow
would
allow
employees
of
the
fire
department
to
purchase
purchase
prior
military
service
to
count
towards
their
pension
calculation
without
paying
the
interest.
That's
normally
required
to
make
such
a
purchase
for
reasons
I'll
explain
in
testimony
administration
opposes
the
bill.
E
E
The
plan
has
required
shared
sacrifice
and
contributions
from
union
members
who
will
see
higher
contributions
and
for
new
non-uniformed
employees
restructured
benefits
plan.
It's
also
required
more
from
other
taxpayers.
As
the
city
contribution
is
increased,
including
through
dedicating
a
portion
of
sales
tax
revenues,
the
pension
board
has
also
played
a
key
role
by
improving
investment
returns,
while
cutting
the
cost
of
those
investments
by
millions
of
dollars.
In
addition,
the
board
has
lowered
the
risk
of
the
fund's
investments
by
doing
things
like
eliminating
hedge
funds
from
its
holdings.
E
All
that
shared
work
has
led
to
slow
but
steady
increases
in
the
pension
funds,
funded
percent
and
a
sustainable
path
to
increased
funding
that
the
pew
foundation
said,
made
the
city's
pension
system
much
more
likely
than
other
cities
pension
systems
to
continue
to
increase
its
funded
percent
regardless
of
market
conditions
that
hard
work
and
the
progress
it's
created
lead
us
to
oppose
any
steps
that
we
think
would
move
the
pension
fund
in
a
different
direction.
By
enhancing
benefits.
E
This
bill
would
take
a
step
in
the
wrong
direction
for
the
pension
fund,
because
it
would
mean
the
fund
would
be
giving
up
the
interest
that
it
typically
receives
when
employees
buy
back
military
time.
The
administration
also
believes
the
changes
in
benefits
for
represented
employees
would
be
more
appropriately
addressed
through
the
collective
bargaining
process.
E
Finally,
we
believe
that
before
any
action
is
taken
on
the
bill,
an
actuarial
analysis
should
be
performed
on
this
potential
cost
to
the
pension
fund,
and
I
should
also
add
that
I
have
talked
to
the
sponsor.
It's
mr
coughlin,
and
we
have
all
agreed
that
we
should
continue
to
work
to
see
whether
there
are
ways
to
get
at
the
intent
of
the
bill
if
it's
not
this
exact
formation.
So
thank
you
for
the
consideration
and
the
opportunity
to
testify
and
I'm
happy
to
answer
any
questions
you
may
have.
B
G
I've
been
you
know,
proudly
serving
in
that
role
for
the
past
six
years
and,
like
rob
mentioned
since
my
time
started,
there,
we've
worked
tirelessly,
together
with
the
other
trustees
with
the
chair,
to
reduce
the
cost,
which
were
pretty
significant
when
I
got
there
that
we
were
paying,
we
improved
and
stabilized
the
investment
for
performance.
That
is
absolutely
true
and
we've
increased
the
funding
level,
both
from
contributions,
increased
contributions
from
the
city
and
the
employees.
We
were
hit
in
our
last
contract
with
an
increase
in
our
contribution,
with
no
increase
in
benefit.
G
I
want
to
make
that
clear,
I
believe,
as
trustees
of
the
plan,
we
are
entrusted
and
actually
expected
by
all
city,
employees
and
taxpayers
alike,
to
constantly
seek
ways
to
improve
the
performance
and
lower
the
overall
cost
to
the
taxpayers.
I
don't
think
anyone
on
this
car
would
disagree
with
that.
I'm
presenting
today
to
request
that
eligible
employees
be
given
an
opportunity
to
purchase
their
prior
military
service
without
interest.
G
I
can
summarize
over
the
next
few
minutes
why
I
believe
this
makes
sense
and
how
it
actually
reduces
the
cost
to
the
city
in
the
long
term.
The
one
key
point
that
I
I
disagree
with
mr
dubo
there's
an
assumption
made
that
this
will
cost
the
pension
system.
This
will
hurt
the
funding
level
and
there's
an
assumption
made
that
this
is
a
cost,
not
a
benefit.
We've
never
had
an
actuary
look
at
that.
I
think
that's.
G
The
key
here
is
that
there
are
ways
to
to
get
things
done
and
I'm
going
to
explain
that,
but
I
really
disagree
that
we
assume
this
is
a
cost.
I
don't
like
that.
I
think
we
have
to
assume
that
this
is
a
different
way
of
looking
at
things.
You
know
in
the
past,
the
city
has
offered
tax
amnesty
and
it's
worked
pretty
well
right.
We've
gotten
revenue
streams
in
the
door
by
thinking
differently.
So
that's
what
I'm
asking
for
today
is
that
we
actually
look
at
this
rather
than
just
assume
that
it's
a
cost.
G
So
I'm
going
to
take
a
quick
step
to
explain
pension.
I
think
pension
can
be
a
very
confusing
topic
for
a
lot
of
people,
so
I
just
want
to
take
a
couple
minutes
to
explain
that
the
normal
cost
of
the
pension
plan
to
the
city
is
actually
very
low
when
you
compare
it
to
what
they're
actually
paying
the
normal
cost
for
2021
is
projected
to
be
just
over
a
hundred
million
dollars
where
the
amazon
amortized
payment
is
over
600
million.
G
That's
the
city
paying
for
previous
underfunding
many
many
years
ago
and
to
mr
dubose
credit
he's
addressed
it
nicely
in
recent
years,
but
the
bulk
of
the
payment
is
for
the
amortization
not
for
the
normal
cost
of
pension.
So
that
being
said,
the
goal
is
to
get
the
fund
to
a
hundred
percent
funded
as
fast
as
possible.
G
When
you
have
a
one
hundred
percent
funded
pension
fund,
your
amortization
cost
is
zero,
so
you're
truly
paying
the
normal
cost
year
by
year,
which,
in
some
of
the
slides,
I
showed
you
that
the
cost
drops
from
700
million
a
year
down
to
about
100
million.
It's
a
significant
savings
when
you
get
to
100
funding
so
to
understand.
G
How
do
we
fund
our
pension
system?
Well,
there's
three
sources
of
income:
there's
the
employee
contributions,
that's
what
we
as
employees
pay
out
of
each
paycheck
there's
the
employer,
which
is
the
city's
cost.
I
just
spoke
about
that,
and
in
a
properly
funded
pension
fund,
the
biggest
source
should
be
your
investment
return.
Our
current
budgeted
rate
of
return
is
7.55,
so
you
can
see
where,
if
we
were
fully
funded,
that
investment
return
would
be
providing
significantly
more
income
to
the
fund
than
the
employer
or
the
employees.
G
So
the
the
point
of
this
is
quite
simple.
Right
now,
nationwide
is
a
third
party
administrator
that
we
hired
to
manage
our
deferred
comp,
our
457
plan.
They
do
a
great
job
and
currently
the
assets
under
management
that
are
all
of
the
employees
on
these
assets.
A
hundred
percent
is
just
about
three
billion
dollars.
That's
about
half
of
what
we
have
in
our
pension
fund,
so
there's
a
significant
amount
of
assets
in
deferred
comp.
G
G
When
we're
50
underfunded,
wouldn't
we
look
at
ways
to
transfer
that
money
across
the
floor
into
our
pension
fund
and
therefore
we
can
make
the
7.55
we
can
reduce
the
city's
overall
normal
cost
going
forward
and
there's
other
ways
we're
going
to
save
money
and
I'll
get
to
that
in
just
a
minute.
So
in
the
end,
that's
the
ask
here,
because
you
can
pay
for
this
military
buyback
with
deferred
comp
assets.
It's
considered
a
rollover.
G
There
is
no
no
taxable
event
for
the
employee,
so
we
assume
most
employees
in
this
day
and
age
who
have
healthy
deferred.
Cop
accounts
are
going
to
transfer
the
money
from
nationwide
to
the
city
of
philadelphia
pension
fund.
So
that's
that
you
know
that's
where
I
consider
this
a
big
win.
Mr
dubo
talked
about
this.
This
is
or
I'm
sorry,
I
think,
councilman
heenan
we've
done
this
before
in
1999.
G
Only
107
city
employees
took
advantage
of
this
now
back
in
1999
deferred
comp
was
a
very
new
concept.
The
account
balances
were
just
low,
so
I
think
that
was
a
big
deterrent.
You
really
had
to
reach
into
your
own
pocket,
which
is
a
tough
thing
for
city
employees
to
do.
We
don't
make
a
lot
of
money
right
now
with
the
deferred
comp
assets
being
where
they
are.
I
think
we
would
see
an
increased
usage
if
we
were
to
offer
a
benefit
like
this
in
some
form.
G
I
also
believe
strongly-
and
this
is
where
I
think
and
I'll
stress
I
think
this
is
where
I
want
to
take
an
actuary
and
take
a
good
hard
look.
I
have
to
believe
the
city's
finances
are
very
strange
right
now,
as
is
most
of
the
country
and
probably
the
world
for
obvious
reasons
right,
and
that
is
going
to
lead
to
some
tough
decisions,
not
too
far
down
the
road,
and
I
don't
want
to
get
into
that
today.
G
they're
much
higher
contribution
rates
for
the
fire
department.
Specifically,
a
new
employee
pays
eight
and
a
half
percent
contribution
rate
under
plan
16..
Anyone
hired
before
that,
which
is
the
bulk
of
our
people,
that
we
think
would
take
advantage
of
this.
Our
older
employees
they're
either
paying
six
percent
or
six
point
eight
four
percent:
that's
over
two
percent
less
towards
their
pension.
That's
a
pretty
big
savings.
If
we
can
get
the
lesser
contributing
employees
off
the
payroll
and
replace
them
with
higher
contributing
employees.
G
Of
course,
newly
hired
employees
earn
significantly
less
pay.
You
know
we
have
longevity
pay
in
the
fire
department
and
approximately
every
five
years
we
get
a
bump
in
pay.
Well,
a
30-year
employee
is
going
to
make
a
heck
of
a
lot
more
than
a
brand
new
employee,
even
if
they're,
at
the
exact
same
rank.
So
there's
certainly
a
cost
savings
to
be
looked
at
there,
newly
hired
employees
because
of
contract
changes
over
the
years.
They
earn
significantly
less
leave
balances,
and
by
that
I
mean
they're
sick
in
their
vacation.
G
You
know
so.
In
summary,
I
believe
we
need
to
explore
this
concept
to
better
determine
the
potential
cost
and
benefits
to
the
employees,
the
pension
fund
and
the
taxpayers.
In
a
time
when
the
city
finances,
as
I've
mentioned,
are
most
certainly
under
strain.
I
strongly
believe
this
could
prove
to
be
a
cost-effective
matter
to
motivate
longer
term
employees
to
consider
retirement
at
an
earlier
age
and
allow
the
city
to
recognize
cost
savings
for
many
many
years
to
come.
Thank
you
for
your
time
and
I'm
certainly
open
to
any
questions.
B
F
Thank
you,
chairperson
parker,
it's
more
of
just
a
kind
of
a
a
quick.
You
know,
overall,
on
on
the
testimony
that
we
just
heard.
Mr
devoe,
I
think
there's
some
some
interesting
points
one.
I
know
that
you're
protecting
as
a
fiduciary
responsibility
or
pension
fund-
and
we
are
you
know
on
our
way
and
we
have
done
much
much
better
over
over
the
years
and
that
we
are
now
than
we
have
over
the
years.
F
Some
interesting
points
that
were
made
early
retirement,
all
right,
reducing
the
the
cost
of
our
fund
and
and
benefits
as
opposed
to
layoffs
or
furloughs.
I
think
that's
interesting,
and
these
are
some
of
the
takeaways,
which
I
hope
that
that
you
and
mr
coughlin
could
get
together
and
discuss
an
actuarialist.
F
I
don't
believe
that
that
has
been
as
steps
have
been
taken
in
the
past,
for
that
and
you
know
when,
because
the
conversation
is
now
real
and
you
know
other
things
that
you
can
take
a
look
at
that
as
the
bill
is
introduced.
You
know
the
window
of
opportunity
is
12
months.
It
doesn't
have
to
be
that
long,
just
like
any
amnesty
programs
and
the
years
of
service
or
the
buyback
is,
is
10
years.
That
also
is,
and
should
be
on
the
table
for
for
conversation.
F
D
Thank
you,
chairperson
parker,
for
this
hearing
today
and
thank
you,
everyone,
who's
joined
in
and
please,
chairperson,
parker.
Thank
max
for
those
comments
earlier
for
me.
Okay,
I
think
this
is
a
good
discussion
to
have,
in
fact,
it's
like
really
an
extension
of
this
morning,
which
I
spent
listening
to
you,
chairperson,
parker
and
other
panelists
talk
about
retirement
savings
and
just
how
important
it
is
to
teach
people
how
to
save
for
retirement
and
keep
themselves
out
of
trouble
in
the
future.
D
So
they
have
really
economic
benefits
as
they
get
older,
but
making
sure
we
do
right
for
our
city.
Employees
is
also
something
we
need
to
consistently
be
on
top
of
they
put
a
lot
of
hours
in
working
for
the
city.
So
I'm
grateful
for
any
new
ideas.
We
can
review
in
this
party
to
help
out
our
city
employees.
D
So
with
that,
as
this
conversation
continues
after
today,
I
hope
we'll
make
an
effort
to
review
the
fiscal
impact
analysis
of
these
types
of
ideas
before
any
votes
or
bargaining
discussions
occur,
and
I
hope
we
can
make
that
a
feature
of
all
these
discussions
regarding
pension-related
bills
into
the
future.
Thank
you
very
much,
chairperson
parker.
Thank
you.
B
B
I
also
appreciate
you
all
I
mean
brian,
even
in
your
comments,
councilman
heenan,
if
it
it's
always
music
to
my
ears,
when
we
affirm
and
council
member
dom
when
we
affirm
when
the
city
finally
gets
it
right,
you
know
and
that
we
are
moving
in
the
right
direction.
You
know
with
just
under
50
and
trying
to
figure
out
how
we
get
to
80
funded
within
the
next
decade.
B
B
I
mean
it's
just
been
a
whole
team
of
people
working
with
the
bryants
you
know
of
the
world
and
all
of
the
collective
bargaining
units
from
all
of
our
labor
unions
that
have
helped
us
get
there.
So
councilman,
and
I
thank
you
for
your
leadership
in
bringing
this
issue
to
the
forefront
and
councilmember
dom
for
your
echoing
of
the
importance
of
us.
B
You
know
knowing
a
thousand
and
one
percent,
the
fiscal
impact
that
any
decision
making
that
we
are
going
to
consider
in
the
future
relative
to
our
pension
fund
that
we
take
that
into
consideration.
So
I
want
to
thank
you
all
and
brian
rob.
I
don't
know
if
you
said
it,
but
this
was
my
first
time
hearing
you
brian,
I'm
gonna
have
to
call
you
and
have
some
conversations
about
pensions,
because
I
like
the
fact
that
you,
like
pictures
and
they're,
not
usually
topics.
B
B
B
Councilman
heenan.
I
just
want
to
note
for
the
record
that,
due
to
the
fact
that
the
sponsor
of
the
bill
has
agreed
to
hold
the
bill,
number
two
zero
zero.
Three
eight
zero
in
committee.
This
is
actually
going
to
conclude
the
business
of
the
labor
and
civil
service
committee.
For
today,
the
public
hearing
is
recess
to
the
call
of
the
chair,
and
we
want
to
thank
all
of
our
colleagues
for
being
here
so
much
and
to
rob
and
brian.
Thank
you
as
well.