Would anybody care to do a little analysis of the proposed changes to the firefighter pension plan for us? The basics are these:
Lincoln's firefighters don't receive social security benefits, and their pensions don't increase annually to keep up with inflation. That means the longer a firefighter is retired, the less his monthly pension is worth. The proposal before the City Council would initiate cost of living adjustments (COLAs) in 2010 of the lesser of (a) 1.5% or (b) the Consumer Price Index (CPI).
That's all pretty easy to understand. What's much more difficult to understand -- and what the Council is currently trying to figure out -- is whether it's a good deal for the City. I don't know.
I'm also curious as to whether it's a good deal for the firefighers. A maximum 1.5% annual increase sure doesn't sound like much given the CPI's history. Recent year-to-year changes in the CPI have been roughly in the 2.5% - 3.0% range, on average. And what if the CPI decreases? That hasn't happened since the 1950's, but the possibility exists.
Should the City accept the proposal?
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