On Monday April 27, 2020, The Missouri Legislature will return to Jefferson City to reconvene this year’s legislative session. Many of you are aware but for those who are not, there is pending legislation of concern. Senate Bill 999, sponsored by St. Louis County Senator Gina Walsh is awaiting a Senate hearing. There are from my perspective some major concerns with this legislation which I will explain to you.
This legislation was formulated outside of the Pension Board and without input of the Pension Trustees. The SLPOA and Mayor Krewson’s Office asked Senator Walsh to sponsor Senate Bill 999 without any input from the Pension Board. The Pension Board by law is charged with overseeing any legislation passed. The Pension Legislative Committee did not report to the Board of Trustees any ongoing dialog in the formulation of this bill language or any dialog which led to the Mayor or SLPOA on the need for the legislation. Normally, The Board of Trustee's formulates and structures pension legislation however I would have objected to concessions in exchange for an active Police Officer pay raises.
On January 29, 2020, Mr. Steve Conway, Deputy Mayor for Mayor Lyda Krewson, presented to the Board of Trustees proposed Missouri Senate Bill 999. This was the first time the Board of Trustees saw any of the pension concession language changes, along with language giving the City of St. Louis ordinance authority over the actuary method used to determine the City of St. Louis’s annual contribution to the pension system. That is a problem! Mr. Conway asked the Board of Trustees for an actuary study which is required for all pension legislation and is used to determine costs or savings from the legislation. He also explained that the changes were needed to fund the $10,000.00 pay raise for active Police Officers.
o There is nothing in Missouri Statutes governing The St. Louis Police Retirement System allowing for the trading of any pension benefits for pay raises. It is my opinion that this position is well outside of the fiduciary responsibilities governing the pension trust. Our Pension System identifies and pays pension benefits by law. Proposition P and the City of St. Louis are responsible for ensuring active Police Officers are adequately paid a living wage. The Pension System is responsible for paying pension benefits.
o The laws governing the St. Louis Police Retirement System have been in Missouri Statutes since the 1950’s and were agreed upon by the Missouri Legislature and signed into law by the Governor. They have served
St. Louis Police Officers well and are the major ingredient of our Pension Plan’s stability. Changes, if necessary, are reviewed by an independent party; the Legislature. There is no need to move any language on Police Pensions from State Statute to local City of St. Louis Ordinance. If needed, changes can go through the legislative process of drafting, oversight, hearings and voting. Yes it is hard work and time consuming but necessary to allow for careful and factual review to ensure Retirees, Disabled Officers, Widows and Dependent Children receive their pension benefits . Any form of local control over St. Louis Police Pension matters is unnecessary. We have seen what local control brought to the Firefighter’s Pension and to the current operation of the Police Department. This cannot happen to our Pension System. The Board of Trustees has asked Senator Walsh to remove this language. It is still in Committee Substitute Senate Bill 999 in it's current form and I do not and will not support this language.
The Covid-19 pandemic has caused major financial loses to the economies of the United States and locally to the City of St. Louis and our Pension System. According to what I have received as of April 21, 2020 the Pension System has lost 16% of the fund, which is approximately $127 million. Keep in mind these are preliminary figures and no one is certain what the overall financial outcome will be let alone when the pandemic will end. Rebalancing of our portfolio where needed is taking place. As we move along we will have a clearer picture of the impact and develop a recovery plan.
A few last pieces of information;
With the spread of Covid-19 the Pension Office is only open by appointment. Please call 314-241-1800 to make an appointment. If you don’t get a return call, please let me know and I will work on it.
As of today Senate Bill 999 is alive and well. It is awaiting a Senate Committee Hearing. I have sent Senator Gina Walsh an email asking her to withdraw Senate Bill 999 for the indicated reasons. My email to Senator Walsh is attached. I would ask if you are in opposition to the legislation that you let her know. Her email is Gina.Walsh@Senate.Mo.Gov
Lastly, as St. Louis Police Officers we have always responded to a Police Officer in need of aid. Please check up on each other during these uncertain times. We haven’t been able to meet in a while so it’s important that we look out for each other. Stay safe and healthy.
April 7, 2020
Senator Gina Walsh
RE: Senate Bill 999
Dear Senator Walsh:
I hope this letter finds you and your family well. My name is Michael Frederick and I am a Trustee to the St. Louis Police Retirement System. I am also a retired (37) year veteran of the St. Louis Metropolitan Police Department. I want you to know, no one has asked me to send this message. I see it as my fiduciary duty to the Trust that I have this conversation with you.
I write to you today regarding Senate Bill 999 with the goal of asking you to withdraw the legislation. I have a legal responsibility to provide you with what I see as significant issues that cause me to make this request.
There is no underscoring the financial impact the Covid-19 virus has caused to all government finances. The economic engines of the City St. Louis have shut down. The Police Retirement System Trust has taken a financial hit. The Trust is the source of the monthly checks sent to the retired officers, disabled officers, widows, and dependent children of deceased officers; their check is their lifeline to food, transportation, and medical care. The pension changes listed in Senate Bill 999 will reduce the dollars going into the trust. There could come a time the System could not meet its monthly payroll. Given the unknown future financial impact of the virus on the Plan Sponsor (City of St. Louis) and the Trust I feel that this is not the time for the legislation you have filed.
Mr. Steve Conway, Chief of Staff for Mayor Lyda Krewson, came to the January 29, 2020 meeting of the Board of Trustees and explained that the legislation was needed to give St. Louis Police Officers a $10,000 pay raise. The Board of Trustees has no legal authority to finance pay raises for Police Officers through pension concessions. Mr. Conway also presented Senate Bill 999 to the Board for the first time on this date. This was the first time any information concerning any legislation was seen and read by the currently seated Board of Trustees. Five of the current members of the Board of Trustees were not Trustees in 2017, or 2018. All five Trustees were left out of the formulation of this legislation, yet we are all legally responsible if it is passed. That’s a problem! At the time of this presentation, the Board of Trustees had a brief few minutes to read the complex legislation and Mr. Conway asked the Board to approve an actuarial study for the legislation. The Board of Trustee’s for the St. Louis Police Retirement System are the lawful overseers of the trust, not the SLPOA or City Hall otherwise they would have done the actuarial study. As you know the Board of Trustees found several other legal issues with the legislation. I firmly believe had the Trustees been involved in the formulation of the legislation most of the problems would have been resolved long before the legislation was filed.
The unknown economic downturn is still unfolding for the City of St. Louis and the Pension Trust. The Board of Trustees are committed to our sworn legal fiduciary responsibilities to all pension members. Once the dust has settled and the Board of Trustees and the City of St. Louis has a complete understanding of the economic impact, we can sit down together and develop a map of recovery together. Now is not the time for Senate Bill 999.
Thank you for all that you have done and continue to do for the State of Missouri. I have attached an email I sent to the other Trustees to highlight the seriousness of the current economic environment as it pertains to the Pension Trust and the Plan Sponsor (City of St. Louis). I am available to meet (with masks) to discuss or by phone (314-241-0800). The best to you in your new position.
Michael A. Frederick
St. Louis Police Retirement System
CC: Email to Board of Trustees