A bill to put the pension programs for District of Columbia teachers, police, firefighters and judges on a sound fiscal basis was introduced in the House of Representatives last week.
Rep, Romano L. Mazzoli (D-Ky) said his proposed D.C. Retirement Reform Act would provide $830 million in federal funding over the years to help pay future pension costs for which there now is inadequate funding.
Mazzoli said: "The existence of large, unfunded pension liabilities poses a serious financial problem for the District . . . We in the Congress bear a special responsibility for correcting this situation since it was the Congress prior to Home Rule which . . . created the pension system with its relatively generous benefit levels and its inadequate funding."
The Mazzoli bill orginally was introduced by former Rep. Thomas M. Rees (D-Calif) in 1974 in regard to District police and firefighters.Last year the bill was expanded to include the city's teachers and judges. Other city employees' pension programs do not have the same funding problems and are not affected by the proposed legislation.
Mazzoli, a member of the House District Committee, stressed the tremendous financial burden the District faces in paying for pensions which are legally obligated but unfunded. "Currently, these pension costs are paid by the District from general revenues on a pay-as-you-go basis. Current pension payments for retired police and fire-fighters amount to fully 43 per cent of the total current payroll for police and firefighters," he said.
"It is estimated by the U.S. Tresury that these pension payments will rise to 110 per cent of payroll costs by the year 2020. Obviously, this is unacceptable."
Under Mazzoli's bill, the federal government would assume about 20 per cent of the pension programs' unfunded liability, with the District responsible for the rest. The cost in each of the next five years for the federal government would be about $42 million.
"No federal obligation to help the District of Columbia fund these retirement programs has ever been acknowledged by the executive branch," said Mazzoli. "But, we now have a new administration, one which has pledged to help our nation's financially distressed cities. I hope that this administration will look with favor upon a financial partnership between the federal government and the District in the area of retirement pension," he continued.
Mazzoli's bill would make a number of changes in pension provisions and benefits. Instead of continuing the current eligibility of police and firefighters for a pension after 20 years service regardless of how young they are, it would grant pensions only after such employees reached age 50 and had served 25 years.
Mazzoli said, "The primary reason for runaway costs of police an firefighters retirement system is the large number who retire on full disability.
"Disability retirements in 1975 still averaged 60 for the two departments, which is substantially higher than in such cities as New York and Los Angeles. In addition, the rate of teacher disability retirements is rising." he said.
Mazzoli called for a study to determine whether regulations on disability retirements need tightening.