Mayor’s Office

Joint City Effort Establishes Goals, Framework for Next Round of Bargaining to Ease Taxpayer Burden and Stabilize City Retirement System


November 13, 2014
Contact:  Mike Kanarick

Joint City Effort Establishes Goals, Framework for Next Round of Bargaining to Ease Taxpayer Burden and Stabilize City Retirement System
Retirement Committee Identifies System Departures from National Norms, Proposes Exploring New Risk Sharing Arrangement, Automatic Adjustments 

Burlington, VT – Over the past decade, rapidly growing taxpayer contributions and an increasing unfunded liability (the amount of money the retirement system is obligated to pay in the future for past service costs, but does not currently have available funds to do so) have called into question the long-term sustainability of the City of Burlington’s retirement system.  In a joint effort to address these challenges, the Burlington Retirement Committee – composed of the Mayor, members of the City Council, representatives of each of the four City public employee unions and non-union employees, and members of the Burlington Employee Retirement System (BERS) Board – met between January and October of 2014 to develop a framework for the next round of collective bargaining, possible changes to the City’s Retirement Ordinance, and a number of potential changes to strengthen the system’s foundation. The work is documented in a report prepared for the City Council.

“The framework for pension reform proposed by the Committee would stabilize BERS finances in a manner that ends the steep rise in recent years of pension-related property taxes, ensures the City’s ability to make good on its commitments to retirees, and achieves a long-term resolution of the pension challenges that have plagued the City over the last decade,” said Mayor Miro Weinberger. “I appreciate the work the entire Committee did since January to construct this framework.  While the framework’s goals will be difficult to achieve in the current collective bargaining round, I am encouraged by the process that got us this far and hopeful that we will achieve mutually beneficial results during bargaining.”

The Committee’s report includes a description of that framework, which will serve as the foundation for pension negotiations in the round of collective bargaining now underway with all four Burlington municipal employee unions.  The framework includes:

  • Freezing taxpayer contributions for three years (after which time increases would be pegged to an appropriate index);
  • Restoring the system’s funding level to 85 percent within seven years and maintaining the positive trajectory in the years that follow; and
  • Instituting automatic adjustments that would be agreed to in advance and would share costs between employees and the City should BERS fail to hit these targets in a given year.

With the help of a unanimously selected external consultant, the Committee also identified potential changes to BERS that would achieve these goals.  These changes could include:

  • Making adjustments in areas where Burlington employee benefits and contributions depart from national norms in ways that increase the financial strain on the system;
  • Implementing a new risk-sharing arrangement (currently taxpayers bear a disproportionate amount of the market, mortality, and inflation risk); and
  • Instituting automatic adjustments to the system should certain thresholds be met.

Details on each of these possible approaches are included in the report.

Burlington’s four municipal employee unions are AFSCME Local 1343, the Burlington Fire Fighters Association 3044, the Burlington Police Officers Association, and the International Brotherhood of Electrical Workers Local 300.

*Documents and minutes from the Burlington Retirement Committee meetings can be found on the City website by clicking here.


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