January 29, 2003
A Note To My Fellow Firefighters:
I would like to thank all of the members of the Austin Firefighters Pension Fund for the chance to serve as your elected Trustee on the Board. It has been a tremendous honor and learning experience in balancing all of the perspectives that need to be considered for the best results for all the participants of the plan. I have a great deal of respect for those that have gone before us in building this Pension Plan, and for those that are serving now and in the future that may have to make some difficult decisions in the best interests of the fund to keep the plan stable and healthy for the long haul. And that remains the view that we should all maintain - a very long term perspective.
My term began in January of 2000, which was the last of a stunning bull market run that spanned almost a decade. The fund had incredible returns that generally far exceeded our stated actuarial expectations. Sometimes, the difficult part was deciding what plan enhancements best served the needs of all of our membership. The fund made great improvements, raising the factor, lowering the years of service eligibility, and increasing the minimums we paid to members (and spouses) retired long ago. Then the reality of financial markets and business cycles set in, only to be compounded by world events no one could even begin to fathom.
Now we have endured three consecutive years of financial downturn, an event that hasn't happened since the 1930's. Yes, it has been painful for everyone, to some degree or other, as we have watched our personal portfolios decrease, friends get laid off from jobs and various other fallout from a softening economy. Our fund, while not immune from the market reversals, is not on its deathbed. The time may be coming though, where we as members may have to make some tough decisions. Reducing the factor (maybe in tiers), increasing our contribution rate, either as members voting to increase their contributions incrementally over time, or the city raising their level of contribution as part of some future meet and confer package, and delaying or deferring COLA's for some period of time are all possibilities that must be considered. The bottom line is we all need to begin to think carefully about how we want to preserve the long term health of the plan we have created and count on for our futures. I believe that all of us should prepare to help shoulder the burden of solutions, so that no single group (retirees, new members, or those in mid career) are disproportionally affected. The mentality of the membership should parallel the Pension Board's outlook, which can be summed up in the phrase, "the best interest of the fund and its entire membership". I have great faith that the members of the pension fund and our elected representatives will be able to navigate these difficult financial times through intelligent and equitable choices.