Rumors Concerning Civil Service Reform and Pension System Are Wrong

June 13 2014 | Whats New

Fraternal Order of Police

Crescent City Lodge No. 2 (LA 002)

June 13, 2014

Rumors Concerning Civil Service Reform and Pension System Are Wrong

Yesterday, the FOP began receiving numerous phone calls, emails and texts
seeking answers to rumors being spread about the status of our Civil
Service System, the current reform proposals, and the state of the MPERS
Retirement System.

We do not know where or from whom these rumors are emanating, but they are
causing unwarranted concern among rank and file officers and should stop
immediately. Here is the truth.

Rumor 1: The Municipal Police Employee Retirement System (MPERS) has an
$800 million shortfall and will be bankrupt by 2017.

Fact 1MPERS is a stable retirement system that will be there for you
when you retire.

MPERS is a$2.63 billion dollar system, with assets of approximately $1.76
billion dollars. That means there is an unfunded liability of nearly 35%
of assets, or about $880 million dollars. An unfunded liability is not the
same as a shortfall. In simple terms, an unfunded liability means that if
every retiree, widow, beneficiary and active police officer currently in
the MPERS Retirement System suddenly demanded a full and complete actuarial
payout the system would come up short on that payout. But, of course, such
a situation will never occur.

MPERS is funded by employee contributions (10% of salary), employer
contributions (31% of salaries) and return on investments (14% return for
current fiscal year). The system is currently at 65% funding level. The
Fitch Group, one of the “big three” rating agencies has stated that a 70%
funded public pension system can be considered healthy. MPERS is still
recovering from the devastating impact of the 2007-2009 financial crisis,
but continued growth is expected.

Rumor 2: The City is planning to eliminate PO II, III and IV pay classes.

Fact 2There is absolutely no truth to this rumor.

There is no such plan on the table, and the Fraternal Order of Police has
never even heard such a plan discussed. The fact is that the P.O. IV
promotional list has recently been provided to Chief Landry by the Civil
Service Department. NOPD Public Integrity Bureau is going through the list
to determine eligibility for promotion. Funds have been budgeted to make
those promotions and the Fraternal Order of Police fully expects promotions
to be made in the coming weeks.

Rumor 3: The City is trying to eliminate the Civil Service System.

Fact 3The City is NOT trying to eliminate the Civil Service System.

The City Administration has put forward a package of reforms under the
title “A Great Place to Work Initiative”. This proposal seeks to
eliminate or change certain civil service rules that govern hiring,
promotions, and employee evaluations. When initially presented, the
Fraternal Order of Police strongly opposed the concept and the proposal.
We have met on several occasions (in person and in teleconference) with
both representatives of the CAO’s office and the Civil Service Department.
Since those meetings began, the City has removed or substantially changed
25 of the original 35 proposed rule changes.

One of the most significant proposals still on the table is the equal
ranking of individuals on eligibility lists based on minimal qualifications
rather than on competitive examination. A second remaining proposal is the
elimination of the “Rule of 3”, which demands that the appointing
authority, when hiring and when promoting, be given three candidates from
which to choose, one of which must be chosen. When combined these two
proposed rule changes would allow the appointing authority to select a new
hire or promote an existing employee based on subjective criteria from a
list of all qualified candidates.

The position of the Fraternal Order of Police, as stated at yesterday’s
Civil Service Commission meeting, is that these two proposals would lead
to discriminatory hiring and promotional practices and would violate the
Louisiana Constitution.

The Civil Service Commission has indicated to us that there will be no vote
on the City’s proposal until at least August of 2014. The Fraternal Order
of Police will continue to meet with the City Administration in attempts to
negotiate more meaningful changes to the proposal. If the City refuses to
move off of the Rule of 3 and Competitive Examination proposals, the
Fraternal Order of Police is prepared to file for an injunction to prevent
the Administration from implementing their proposed changes.


” promote and foster the enforcement of law and order; to improve the
individual and collective proficiency of our members in the performance of
their duties; to encourage fraternal, educational, charitable and social
activities among law enforcement officers;

to advocate and strive for uniform application of the civil service merit
system for appointment and promotion;

to support the improvement of the standard of living and working
conditions of the law enforcement profession through every legal and
ethical means available; to create and maintain tradition of esprit de
corps insuring fidelity to duty under all conditions and circumstances; to
cultivate a spirit of fraternalism and mutual helpfulness among our members
and the people we serve; to increase the efficiency of the law enforcement
profession and thus more firmly to establish the confidence of the public
in the service dedicated to the protection of life and property.”.