By Jim Daws, President Atlanta Professional Fire Fighters Association

Atlanta’s firefighters welcome an open, honest discussion about our retirement plans and Atlanta’s underfunded pensions. Sadly, much of the conventional wisdom on this topic is based on emotions, misconceptions and misapplication of other cities’ situations to Atlanta.

Please take a moment to consider some of the myths and facts concerning this issue:

Myth: Atlanta employees receive overly generous pensions.

Fact: The pension review panel appointed by Mayor Reed, and chaired by former AJC publisher John Mellott, found that Atlanta’s pensions are average compared to national and local peer municipalities. While it’s true that Atlanta’s pensions are on-par with surrounding municipalities in percentage of salary, because our pay lags behind, our pensions are far less in real dollars.

Myth: Powerful Atlanta employee unions have extracted exorbitant salaries and pensions.

Fact: Our firefighters are paid about 30 percent less than their peers in surrounding departments. Georgia is a right-to-work state and Atlanta’s unions are legally barred from striking or engaging in any job action, cannot engage in collective bargaining, have never had a contract, cannot compel membership, or use union dues for political activity. The only tools we have are appeals for economic justice and defending our members’ legal employment rights.

Myth: The pension improvements in 2001 and 2005 have caused a huge unfunded liability.

Fact: The pension review panel found that only about 15 percent of the unfunded liability is attributable to the pension improvements. The pensions were improved because Atlanta’s retirement plans were uncompetitive with surrounding municipalities, which hurt the cities’ ability to attract and retain highly-qualified employees.

Myth: The city would be better off in Social Security.

Fact: Atlanta’s employees receive a pension in lieu of Social Security. Municipalities were allowed to opt out of Social Security in the first place because they could provide an equal or better benefit to their workers for less taxpayer contribution through pension plans. That’s still true today. The only thing missing from that winning formula was the discipline on the part of Atlanta’s elected officials to pay the taxpayers’ share toward the plans. Atlanta taxpayers have saved hundreds of millions of dollars by not providing Social Security for city employees.

Myth: City workers can retire after 10 or 15 years.

Fact: Our pensions are based on years of service times a 3 or 2.5 percent multiplier with penalties for each year you retire prior to age 55 for fire and police or 62 for general employees. A firefighter or police officer hired at age 25 who retired with 10 years service would qualify for a 30 percent pension, which would then be reduced by 75 percent. So he or she would receive 7.5 percent of their below-market pay. The penalties would be even greater for general employees. Benefits are capped after 26.6 years for fire and police and 32 years for general employees.

Myth: Taxpayers are paying the full cost of employee pensions.

Fact: Atlanta’s pensions are funded through a combination of employee and taxpayer contributions, and investment returns. Employees contribute 8 percent of their salaries and trustees manage the investments. Our trustees have been good stewards, consistently achieving above-average returns and keeping investment fees low. This reduces the amount paid by taxpayers.

Myth: This huge unfunded liability will bankrupt Atlanta.

Fact: The $1.5 billion liability was a 2009 snapshot taken at the depth of the Great Recession. The liability is amortized over 30 years and about 65 percent of the liability is due to recent poor market performance. As investment markets return to historic norms — which they have begun to do — that portion of the problem will shrink. The remaining unfunded liability are funds that elected officials failed to pay on behalf of the taxpayers – in effect stiffing the employees’ retirement plans. That portion will have to be made up.

Atlanta’s firefighters, police and general employees perform some very difficult and often dangerous jobs. We have kept faith with Atlanta’s citizens and we appeal to the citizens to keep faith with us.