An increase in the lump-sum pension benefit available to retiring Eden Prairie firefighters was ratified Tuesday, Oct. 15, by the city council, even as retirees who are taking the alternate monthly pension payment voiced concern about being left behind.
With this action, the lump-sum pension benefit paid to future retiring firefighters who qualify would increase Jan. 1 from a maximum of $12,400 to $15,000 per year of service, which is the current cap set by state law. The Eden Prairie Firefighter Relief Association last changed that lump-sum benefit in 2018, increasing it from $10,000 to $12,400. The monthly defined pension option hasn’t changed since 2009.
Those who choose the monthly benefit receive it for life, and upon death, the surviving spouse receives two-thirds of that amount for the remainder of their life.
“We feel we should all be brought along as one group,” said Doug Andrews, speaking for a contingent of retired firefighters who attended Tuesday’s city council meeting. Andrews served as a volunteer firefighter from 1981 to 2001.
He said retired firefighters receiving the monthly benefit aren’t opposed to the increase in the lump-sum benefit. “Our frustration is … we’re only rewarding the duty-crew people with the lump sum, forgetting about the 71 (retired) members with the monthly pension,” he said. “We feel we should all be brought along as one group of members. We just want to be on equal footing. There’s a 20% increase here; there should be a 20% increase for us.”
It appears there’s a path forward for the relief association to address that complaint. Association President Collin O’Brien said Tuesday that, after hearing from retired firefighters, his group would undertake an actuarial study to see whether a higher monthly benefit could also be supported by the pension fund.
The relief association maintains that adjusting only lump-sum benefits at this time serves to attract new duty-crew firefighters and retain existing firefighters who haven’t completed the 10-year vesting period, while still keeping pensions fully funded. Monthly benefits that extend for life and then are conveyed to the surviving spouse are believed to pose greater liability for the fund, which currently stands at nearly $23 million and is considered to be in good shape.
The city council recently prioritized increasing the number of Eden Prairie firefighters to reduce response times to fires and other emergencies.
Among council members, the most vocal about the need to also address the monthly pension benefit was Mark Freiberg, who said the monthly pension cap of $1,792 set in 2009 has “a buying power” of $985 in today’s dollars, based roughly on 3% inflation over 15 years.
“You’re doing a disservice by not addressing it,” he told relief association leaders.
Nevertheless, the council voted 5-0 to ratify the lump-sum increase proposed by the association, with Freiberg included.
Other council members said they see approval of the lump-sum change as proposed by the relief association, with continued study of a monthly benefit change, as the best path forward.
“There was a process. It went through the (association) board,” said Mayor Ron Case. “The city council needs to respect that process as well.”
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