July 17, 2019

In the News

Miami commissioners might restore the publicly funded pensions they lost a decade ago

Miami’s elected commissioners enjoy a luxury most part-time workers don’t have — the ability to give themselves publicly funded pensions.

It’s a nice perk that comes with the $58,000-a-year gig, and the current commissioners are taking advantage. With an initial vote on the evening of June 27, they quietly took a step toward reopening a pension program for elected officials that closed when the Great Recession ravaged city finances a decade ago.

Under the new ordinance, sponsored by Commissioner Keon Hardemon, being a part-time elected public servant could come with a healthy retirement paid for by the city’s taxpayers and ratepayers — unlike police officers and firefighters, elected officials would not contribute to their pensions. 

Newly elected Miami commissioners could forgo a separate retirement savings plan — which they contribute to — for a pension. After serving seven years and once they reach retirement age and no longer hold office, they would be eligible to receive a minimum of about $50,000 a year, or half of their roughly $100,000 total compensation after factoring in allowances and emoluments separate from their salaries.

It can get even sweeter. For every year after seven, they would get a 5 percent bump. That means that elected officials that serve two full four-year terms would automatically get 55 percent of their earnings annually for the rest of their lives, about $55,000 a year, paid out in monthly installments. 

For a career politician who can get reelected multiple times, the payoff could be up to a 100 percent pension. Under Miami’s term limits, elected officers cannot serve more than two consecutive terms as commissioner or mayor, but they can run again after being away for a term. 

Current commissioners considering this proposal who have served without a pension could still buy in. For those elected after the pension closed in 2009 and who are in office today, the new ordinance would allow them to vest in six years — though instead of starting the clock this year, they could purchase credits for the years they’ve already served without a pension. Each year would cost about $10,000, plus 3 percent annual interest. In return they’d get about $50,000 a year. 

In the case of Hardemon, who will complete his sixth year in office in November, he would be able to buy his way into a pension before he would have to resign next year to run for a County Commission seat, as expected. In the case of Commissioner Ken Russell, who is running for reelection this year, he could buy credits for his first term and vest in a pension halfway through a second term.

None of this was discussed prior to a first reading vote during the nighttime portion of a long commission meeting on June 27. As a nationwide audience watched Democratic presidential candidates debate in downtown Miami, three Miami commissioners gave initial approval to an ordinance reopening the Elected Officers’ Retirement Trust: Hardemon, Wifredo “Willy” Gort and Joe Carollo. The ordinance was buried in the middle of a marathon meeting during which commissioners discussed other widely watched items including the possibility of Ultra returning to Bayfront Park and approved a controversial 18-acre commercial real estate development in Little Haiti.

With no discussion on the substance of the item, the three commissioners voted in favor on first reading. Commissioner Ken Russell, a previous opponent of giving elected officials pensions, was absent. Commissioner Manolo Reyes cast the lone no vote.

“I ran under a system with no pensions for commissioners, and I’m not going to do anything to change that,” Reyes told the Herald after the vote. He was elected in 2017.

The reopening of the pension system requires one more vote to become law. That vote could come on July 25.

Political pensions are nothing new in Miami. Previous mayors and commissioners served under a pension system that was open from the 1990s until 2009, a system that grew more lucrative after tweaks and pay raises for elected officers during the 2000s. Former mayor Manny Diaz receives $82,500 a year. Former commissioner Marc Sarnoff has a pension worth about $60,000 a year. Michelle Spence-Jones, whose term was interrupted by a two-year suspension while she faced a criminal charge, will receive a $127,000 pension when she turns 55. That figure is inflated due to back pay she received after a jury found her not guilty and she returned to office.

This is not the first time commissioners have attempted to reopen pensions for themselves. After a July 2016 Miami Herald article revealed an effort to revive pensions, the plan went nowhere.

It appears that for two current commissioners who already earned pensions when they served previous terms — Gort and Carollo — the new plan would give them the opportunity to boost their benefits. Gort was a commissioner in the 1990s, then he returned to office in 2010. Carollo previously served as a commissioner and mayor, leaving office in 2001. Because commissioners’ salaries have increased since their first tenures, they would be able to use a larger compensation figure to boost their retirement payments.

Mayor Francis Suarez, who does not have a vote on the commission, would also be able to enter the pension program. He’s in his second year as mayor after serving two four-year terms as commissioner. 

Suarez has also previously opposed pensions for commissioners. He declined to comment on the current legislation.

On June 27, Hardemon’s proposal to resurrect political pensions came grouped with other ordinances that implemented the terms of labor settlements the city reached with the police and fire unions last year — groups of employees who had their pensions capped during a financial emergency in 2010. One of the other ordinances that passed would extend the pension eligibility even further so that about a dozen lawyers in the city attorney’s office would be newly eligible for pensions from a separate retirement trust.

In a statement to the Herald this week, Hardemon said he is backing the measure to ensure the city can attract good employees by offering “just compensation.”

“I am unwavering in my support of public servants earning just compensation for the work that they provide on the behalf of the residents of the city of Miami,” he wrote. “Therefore, I found it necessary to restore the benefits of police, fire, general employee, elected officials, and city attorneys to ensure that we continue to attract and maintain qualified talent in the city of Miami.”

Hardemon would stand to benefit from the change soon. He would be able to buy into the pension program in November, guaranteeing a pension worth at least 50 percent of his wages starting when he turns 60 in 2044. He could secure the pension before his expected resignation to run for County Commission next year.

Russell opposed pensions for elected officials when he campaigned in 2015 and again when the 2016 proposal was made public.

“For part-time work, if I serve my four or eight years, I don’t deserve a lifetime pension,” he told the Herald at the time.

Russell did not respond to a request for comment this week.

Carollo said he voted for initial approval, but he’s not sure he’ll support it on the second vote. He told the Herald he wasn’t clear on all the details when the vote was cast June 27. Carollo was seen shuffling papers and consulting with City Attorney Victoria Mendez on the dais during the vote.

“It really wasn’t clear to me. I’m still not clear on what it entitles,” Carollo said.

Gort said the proposal could change before it returns for a final vote. 

“My understanding is they’re still playing with it,” he said.

If approved, the expanded pension program would cost the city an additional $462,000 in the upcoming budget year, according to the city’s proposed budget. The total cost for the Elected Officers’ Retirement Trust would be $829,000 next year.