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Giving up the legal proceeding on the tier 2 pension for those 60 firefighters will cost the taxpayers $2.8 million according to the pension actuarial experts.
What is the cost for the free lifetime healthcare for those 60, is anyone's guess. I doubt the fiscal note will address that cost.
More importantly, the city is giving up the right to determine if the City Council and Mayor can set working conditions for future employees by establishing ordinances.
The OPEB trust fund is a ponzi scheme that will make no real impact. For example a new firefighter making $50,000 a year would contribute $1,000 to the OPEB fund. To get the contribution to $100,000 a year, 100 new firefighters need to be hired.
Keep in mind the annual required contribution that should be contributed to OPEB is $25,000,000. That number grows by millions each year. So with 100 new employees hired, the contribution would be .000004 percent of the annual required contribution.
To put that in prospective, if parents of a newly born child desired to save $200,000 for their child's college fund, they would contribute 80 cents to the fund annually.
The mayor must have consulted with Bernie Madoff to come up with this plan because by doing this the city will be able to write off about hundreds of millions of dollar in unfunded liabilities by contributing pennies into a trust fund.
Here is a great presentation by Council President Merolla from 3 years ago on why this OPEB fund is a fraud.
https://youtu.be/dX7uImhkJgs
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