The Mehlville Fire Protection District Board of Directors voted unanimously in closed session last week to issue an offer to union employees to settle ongoing litigation involving the district’s pension plan.

Board of Directors Chairman Aaron Hilmer told the Call the board’s proposal is a “counteroffer” to a settlement offer presented to the board Jan. 17 by the Executive Board of Local 1889 of the International Association of Fire Fighters.

Union employees late last month filed a notice of appeal seeking to overturn an August ruling that upheld the board’s authority to make changes to the district’s pension plan.

Union employees’ request for a permanent injunction prohibiting the Board of Directors from changing the fire district’s pension plan to a defined-contribution plan from a defined-benefit plan was denied Aug. 27 by St. Louis County Circuit Court Judge Thea A. Sherry.

On Dec. 24, Sherry denied union employees’ motion for a new trial, but granted their motion for an injunction pending appeal that prohibits the board from making any changes to the district’s pension plan. However, Sherry’s injunction excludes employees hired after March 31, 2006.

To that end, the Board of Directors voted unanimously last week to adopt a resolution amending the district’s defined-contribution plan to provide for contributions for employees hired after March 31, 2006.

“As we know, for the past couple of years we have been unable to give a contribution to people eligible for the defined-contribution plan,” Hilmer said during the Jan. 17 meeting. “This basically amends it because we can’t give them ’06 and ’07.

“So for the people hired after March 31 of ’06, their percentages for 2008 will be between 22.5 percent and 30 percent based on years of service …”

Under the resolution, the district will contribute a percentage of an employee’s total compensation to the defined-contribution plan based on years of service. For 2008, employees with 15 years of service will receive 22.5 percent; 15 to 19 years, 24.5 percent; 20 to 24 years, 26.5 percent; and 25 or more years, 30 percent.

For 2009 and future years, employees with less than 15 years of service will receive 8 percent; 15 to 19 years, 9 percent; 20 to 24 years, 10 percent; and 25 or more years, 11 percent.

During an interview Friday, Hilmer told the Call, “… All employees we’ve hired after March 31 of ’06 probably represents 10 to 13 percent of our work force. They’re all on the defined-contribution plan now and they’re included in those percentages. And that is something that was fought against for two years and it’s clear that we’re delivering on the reforms we promised.”

At the end of the Jan. 17 meeting, Local 1889 President Bob Strinni and members of the union’s Executive Board presented a proposal to settle the pending litigation.

Among the union’s proposals are:

• A 3-percent increase in the current contribution rates for the defined-contribution plan, effective Jan. 1, 2009. As requested, those rates would range from employees with less than 15 years of service receiving 11 percent; 15 to 19 years, 12 percent; 20 to 24 years, 13 percent; and 25 or more years, 14 percent.

• Upgrade the Standard Insurance disability benefits to a higher level of payout.

• Matching contribution plan — for each 2 percent of an employee contribution, the district would match 1 percent, up to a 2-percent maximum.

The board’s settlement offer states it must be accepted before March 1. In addition, the district will require a full settlement re-lease and dismissal of the pending appeal.

The board’s proposals include:

• 2008 contributions to the defined-contribution plan the same as in the resolution adopted Jan. 17. For 2008, employees with 15 years of service will receive 22.5 percent; 15 to 19 years, 24.5 percent; 20 to 24 years, 26.5 percent; and 25 or more years, 30 percent. For 2009 and future years, employees with less than 15 years of service will receive 8 percent; 15 to 19 years, 9 percent; 20 to 24 years, 10 percent; and 25 or more years, 11 percent.

• An upgrade in the Standard Insurance disability benefits to a higher level of payout, excluding a change in the waiting period, which will remain at 180 days. However, each employee may choose to purchase a short-term disability policy offered by the district.

• The district will offer a 457 match program. The district will match one-third of the first 6 percent of gross wages up to a maximum of 2 percent of total gross wages. The match program would be effective with the acceptance of the settlement.

Of the 22.5 percent to 30 percent contributions being offered for 2008, Hilmer told the Call, “… People might think that’s outrageous — 22.5 to 30 percent — the reason is because once we started the defined-contribution plan on March 31 of ’06 because of the court actions, no one’s received any type of payment. We were trying to make sure that people don’t miss out on those two years (2006 and 2007). So those numbers are the synthetic numbers for 8 to 11 percent.”

About the 457 match program, Hilmer said, “We’re not giving away free money. The only way someone can get that is they have to start saving some of their own. So we’re putting an incentive out there for people to save for their retirement. Actually, this is something (board Treasurer) Mrs. (Bonnie) Stegman brought up two years ago. Before we made this change, she threw it out there and their response was see you in court. So we’ll see if they have a different response this time.”

Hilmer said he hoped the union employees would accept the settlement offer.

Efforts to contact Strinni and Doug Weck of the Local 1889 Executive Board were unsuccessful before press time.