INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS HAROLD A. SCHAITBERGER THOMAS H. MILLER General President General Secretary-Treasurer

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2 INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS HAROLD A. SCHAITBERGER THOMAS H. MILLER General President General Secretary-Treasurer April, 2016 Dear Member of Congress: On behalf of the 300,000 men and women of the International Association of Fire Fighters, I am pleased to provide you with a copy of our 2016 Legislative Issues Book. Our nation s first responders face significant challenges at the federal, state and local level, and are directly affected by the decisions made in Washington, D.C. This briefing book is intended to provide you with a better understanding of the perspective of the nation s professional fire fighters and emergency medical personnel on some of the issues facing Congress in From April 3-6, hundreds of IAFF members from across the country will come to Washington, D.C. to attend the IAFF s annual Legislative Conference and meet with their elected representatives. I hope you will take this opportunity to meet with your fire fighter-constituents to discuss the issues outlined on these pages, as well as the challenges they are confronting at the state and local level. Thank you for your consideration of our views. The IAFF Department of Governmental Affairs stands ready to assist you and your staff throughout the year. Please do not hesitate to call on us. We look forward to a cooperative and productive year. Sincerely, A Harold A. Schaitberger General President

3 IAFF Legislative Issues Book 114th Congress - Second Session Table of Contents Issue Page Establishing a National Fire Fighter Cancer Registry Fact Sheet 4 Key Points 5 Protecting Public Sector Pensions Fact Sheet 6 Key Points 8 Federal Fire Fighter Retirement Equity Fact Sheet 10 Key Points 11

4 IAFF LEGISLATIVE FACT SHEET FIRE FIGHTER CANCER REGISTRY The IAFF supports H.R. 4625, the Firefighter Cancer Registry Act, and encourages Members of Congress to cosponsor the bill. BACKGROUND Fire fighters are exposed to a wide range of harmful toxins on a regular basis throughout their careers, and scientific studies have consistently demonstrated a strong link between fire fighting and cancer. Unfortunately, many such studies have been limited by relatively small sample sizes and an underrepresentation of certain demographic groups including women and minorities. Many studies have also lacked key data regarding a fire fighter s employment experiences such as years on the job and the number and type of incidents responded to throughout one s career. Such limitations have slowed the progress of research examining cancer trends among fire fighters. To address such limitations, Representatives Hanna and Pascrell have introduced the Firefighter Cancer Registry Act to establish the first national cancer registry specifically for fire fighters. The registry will require detailed data collection about fire fighters with cancer on a national scale, providing scientists with the specialized information they need for research activities. Such research will help strengthen our understanding of the link between fire fighting and cancer and could potentially lead to better prevention and safety protocols. CURRENT LEGISLATION House: Summary: H.R. 4625, the Firefighter Cancer Registry Act Sponsors: Representative Richard Hanna (R-NY) Representative Bill Pascrell (D-NJ) The Firefighter Cancer Registry Act would create a national cancer registry specifically for fire fighters, managed by the Centers for Disease Control and Prevention, to improve data collection and research on cancer in fire fighters. CONGRESSIONAL ACTION 2/25/16: H.R was introduced in the U.S. House of Representatives and referred to the Committee on Energy and Commerce. 4

5 KEY POINTS FIRE FIGHTER CANCER REGISTRY Fire fighters are routinely exposed to a variety to known carcinogens in chaotic and uncontrolled environments for significant periods of time. Despite modern advances in personal protective equipment and clothing for fire fighters, such equipment is often inadequate or only partially effective at providing physical protection for a fire fighter s body, skin and respiratory system. Fire fighters have elevated rates of many types of cancer, and cancer is the leading cause of line of duty deaths among fire fighters. A 2013 study by the National Institute of Occupational Safety and Health (NIOSH) found that fire fighters have a 14% increased risk of dying from cancer as compared to the general population. Multiple studies have demonstrated statistically higher rates of multiple types of cancers in fire fighters as compared to the general population, including multiple myeloma, brain cancer, leukemia, prostate cancer, esophageal cancer, kidney and lung cancers and many others. Despite the knowledge gained from previous studies, many have been limited by relatively small sample sizes and an underrepresentation of certain demographic groups including women and minorities. Studies have also been limited by the lack of key data such as the number of years on the job and the number and type of exposures. Many questions regarding the relationship between fire fighting and cancer need further research, including the contribution of different routes of exposure, the effectiveness of personal protective equipment and decontamination procedures, the relationship between certain flame retardants and suppression foams and cancer development, as well as many other unstudied or understudied topics. A specialized cancer registry specifically for fire fighters will provide scientists with detailed data regarding fire fighters with cancer on a national scale, allowing researchers to more fully examine and understand the broader epidemiological cancer trends among fire fighters. Such research will better improve our understanding of cancer among fire fighters and could potentially lead to the development of more sophisticated safety protocols and safeguards. The Firefighter Cancer Registry Act has been endorsed by every major national fire service organization representing professional and volunteer fire fighters and fire chiefs, including the International Association of Fire Fighters, the International Association of Fire Chiefs, the National Volunteer Fire Council, and the Congressional Fire Services Institute. 5

6 IAFF LEGISLATIVE FACT SHEET CONGRESSIONAL ATTACKS ON PUBLIC PENSIONS The IAFF opposes PEPTA and the SAFE Retirement Act legislation aimed at weakening public pension plans and encourages Members of Congress to oppose the bills and any additional legislation which incorporates the provisions of PEPTA or the SAFE Retirement Act. BACKGROUND Public pension plans have been under attack in Congress for several years. While many plans suffered significant losses during the Great Recession, the rebounding economy and reforms implemented in every state have combined to restore most plans to longterm financial stability. Nevertheless, opponents of defined benefit pension plans continue efforts to undermine and ultimately abolish the pensions of fire fighters, law enforcement officers, teachers and other public servants. Two pieces of legislation, the Public Employee Pension Transparency Act (PEPTA) and the Secure Annuities for Employees (SAFE) Retirement Act, introduced in previous sessions are at the heart of this attack. Although neither proposal generated much support, the two have now been proposed as add-ons to congressional efforts to address the debt crisis in Puerto Rico. PEPTA and the SAFE Retirement Act work in tandem to encourage states and municipalities to do away with defined benefit pension systems. PEPTA aims to confuse legislators by forcing plans to issue reports that create the impression that even the best funded plans are in danger of going bankrupt. It would achieve this by requiring plans to assume unrealistically low rates of return, and disregard the prudent fiscal analysis of plan actuaries. SAFE encourages states and municipalities to replace defined benefit plans with private sector annuity contracts that offer no guarantee of any retirement benefit at all. The first proposal fabricates a crisis while the second offers a harmful solution. Further, PEPTA would impose unprecedented and duplicative federal reporting requirements on state and local governments. Public pensions are already among the most transparent investment vehicles, and are required to issue far more detailed reports than the private sector alternatives. Despite its name, PEPTA has little to do with transparency. It is simply an attempt to create a false impression about the fiscal health of pension systems. The SAFE Retirement Act would then take advantage of this manufactured crisis by offering states a way to privatize employee retirement plans. This legislation would allow but not require public employers to purchase insurance annuity contracts each year on behalf of all employees. The employee s retirement benefit would then be determined by the number of contracts purchased on their behalf and the amount of each contract. With no requirement to purchase these contracts, the retirement savings of public workers would be subject solely to the generosity and whims of their employer on a year-by-year basis. Employees would have no way of knowing from year to year if their employer is going to purchase an annuity contract on their behalf or the amount of such contract, making it impossible to plan for a secure retirement. Current defined benefit pension systems provide much more than retirement benefits, providing death and disability benefits for fire fighters who are injured in the line of duty and survivor benefits for family members left behind. Attempting to purchase annuities that offer these benefits would reduce any projected retirement benefit to a level far below what a fire fighter and their family would need to live on in retirement. Since the financial woes of the Great Recession, every single state legislature has taken steps to reform and strengthen their pension systems. The vast majorities of plans across the country are adequately funded and present no risk to taxpayers. PEPTA and 6

7 IAFF LEGISLATIVE FACT SHEET CONTINUED SAFE are designed to mislead the public and elected officials into believing a crisis exists and then implementing an ill-considered and unworkable solution to fix the imaginary crisis. Despite having little to do with pension issues, the Puerto Rico fiscal crisis has provided a new opportunity for opponents of defined benefit pension systems to resurrect their stalled efforts. Congress is currently debating plans to help Puerto Rico manage its debts and restore fiscal stability. Pension opponents are working to add proposals such as PEPTA and SAFE onto this legislative initiative. Claims that pension liabilities are likely to lead to Puerto Rico-like fiscal crises in states and municipalities are simply not credible. Recent experience with alternatives to defined benefit pension plans have proven once again that traditional pensions provide the most secure retirement for workers and are cost effective for states and local governments. Private sector employees, many of whom had their defined benefit plans replaced with 401(k) plans, are now nearing retirement age without adequate savings and will be forced to delay retirement perhaps indefinitely. State and local governments that have been considering moving away from defined benefit plans are discovering making the shift will be costly to taxpayers, as well as bad for workers and retirees. For public safety employees, defined benefit plans are especially important. The early retirement ages and high rates of disability that characterize firefighting require the guarantees only pensions can provide. Moreover, because most fire fighters are not enrolled in Social Security, pensions are often their only source of retirement income. Fire fighters who risk their lives every day protecting their community deserve a secure retirement. CURRENT LEGISLATION Public Employee Pension Transparency Act House: Summary: H.R. 4822, the Public Employee Pension Transparency Act Sponsor: Representative Devin Nunes (R-CA) PEPTA would require public pensions to calculate their long-term obligations using unrealistically low rates of return on investments, and create a false picture of the plans funded status. SAFE Retirement Act Senate: Summary: The Secure Annuities for Employees Retirement Act Sponsor: Senator Orrin Hatch (R-UT) The SAFE Retirement Act would replace public employees traditional defined benefit pension plans with annuities purchased from insurance companies. CONGRESSIONAL ACTION The SAFE Retirement Act is expected to be reintroduced as free-standing legislation in the 114 th Congress. 12/9/15: Senator Orrin Hatch introduced S. 2381, the Puerto Rico Assistance Act, which included both PEPTA and SAFE. 3/21/16: H.R was introduced in the U.S. House of Representatives and referred to the Committee on Ways and Means. 7

8 KEY POINTS CONGRESSIONAL ATTACKS ON PUBLIC PENSIONS Supporting Public Pensions In the face of an often times unpredictable market, a defined benefit plan continues to be the most reliable and financially sound retirement option. Public pension plans have proved highly effective in investing retirement assets and achieving target returns over their long time horizons. In all measurements of success, defined benefit plans outperform defined contribution plans, from efficiency to consumer protection to income replacement. Pensions are especially important in the fire service. Fire fighters receive a stronger, safer retirement benefit the longer they stay on the job, which promotes a highly qualified workforce and reduces turnover. Defined benefit pension plans are more cost effective than their counterparts. Three states that recently switched from a defined benefit to a defined contribution plan experienced higher costs while worsening their budget problems rather than solving it. These case studies demonstrated that the best way to fund any pension plan is through implementing a responsible funding policy with full annual required contributions rather than abandoning it for a 401(k) style plan. Defined benefit pensions provide a more secure retirement. A recent economic study found the switch to 401(k) style plans away from DB plans over the past 30 years has resulted in middle and low income workers being drastically unprepared for retirement. Nearly half of all working-aged families without a pension have no money in retirement accounts and for people between the ages of 56 and 61, the median retirement account savings is $17,000, not nearly enough money to prepare a family for the coming years of retirement. Opponents of pensions argue that plans assume an unrealistic rate of return and instead should use a lower, more reliable number; such as the US Treasury Bond rate. The truth is current projections are already highly reliable. Actuaries use a cautious set of calculations based on decades of proven returns to determine appropriate projections over the long term. The solution from opponents would project returns so small that funds would appear bankrupt. The SAFE Act and PEPTA language attached to the Puerto Rico assistance legislation is totally unrelated to Puerto Rico. This strategy is a blatant attempt to use the crisis to attack pensions. 8

9 KEY POINTS CONTINUED PEPTA Additional reporting requirements like those mandated under PEPTA would be wasteful. States and localities already require full transparency, and adding a duplicative layer of federal reporting will impose additional burdens on pension plans without providing any helpful information to plan participants or taxpayers. How a pension plan is designed, managed and paid for has always been determined by state and local governments. The states have a proven track record of providing appropriate solutions and these efforts preclude the need for overbearing federal regulation. Projections for long term rates of return are currently determined by professional actuaries, based on prudent financial analysis and actual investment history. PEPTA would usurp the role of these professionals, and create an arbitrary standard chosen to achieve a political goal. PEPTA would mandate governments issue misleading reports that dramatically underestimate the financial health of pension systems in an effort to create the appearance of a crisis. SAFE Act The SAFE Act does not guarantee a retirement benefit. Contrary to claims, the new and voluntary insurance annuity plan would not provide any sort of guaranteed benefit upon retirement. The employer would decide each year whether to purchase an annuity contract and how much to spend it could be zero. The retiree s benefit would be wholly dependent on a year-to-year decision made by the employer. Proponents of annuities claim they provide an adequate benefit for retirement. However fire fighter retirement benefits include more than just a pension check. Because of the unique nature of the job, death and disability benefits are staples of any fire fighter retirement package. With pension plans, these costs are factored in and accounted for, but in a typical annuity package these would be considered add-ons and increase the cost of the annuity dramatically. An increase in cost for purchasing an annuity contract with these necessary protections would result in diminished benefits. Proponents of the SAFE Act claim annuities will be protected against insurance company bankruptcy because the assets are backed by state insurance guaranty associations. But it is unclear if these state associations would be able to cover the large sums contained in public employee retirement systems. In the past, state guaranty associations have lacked sufficient resources to cover large losses and had to be bailed out by taxpayers. If enacted, the SAFE Act would impose large transition costs on the employer as it does not address the large legacy costs associated with converting defined benefit plans to insurance annuities. Employers would be responsible for funding the new annuity plan as well as the old defined benefit plan without continued contributions from workers. 9

10 IAFF LEGISLATIVE FACT SHEET FEDERAL FIRE FIGHTER RETIREMENT The IAFF supports H.R. 4729, the Fire Fighter Pay Equity Act, and encourages Members of Congress to cosponsor the bill. BACKGROUND Under current law, federal fire fighters are the only federal workers that receive partial retirement credit for their regularly scheduled work shift. This is due to the complicated formula, used by the government, to calculate pension benefits for federal fire fighters who protect military installations, veterans hospitals, and other critical federal properties. Fire fighters employed by the Department of Defense are normally required to work 19 hours of mandatory overtime per week, in addition to their 53 hours of non-overtime work. Because of this unique arrangement, federal fire fighters receive only partial credit for work they are required to do, effectively denying them the pension credit they have earned. In 1998, Congress reformed the pay system of federal fire fighters to ensure that they receive a fair hourly rate of pay. Despite improvements in the hourly wage rate, the reforms fell short of adequately incorporating a fire fighter s entire pay, including compensation for the mandatory 19 hours of overtime work. To correct the inequity, the Fire Fighter Pay Equity Act would change the calculation to ensure that a fire fighter s pension is based on the full value of pay compensation received during their regular tour of duty. CURRENT LEGISLATION House: Summary: H.R. 4729, the Federal Firefighter Pay Equity Act Sponsors: Representative Gerry Connolly (D-VA) Representative Michael Fitzpatrick (R-PA) Changes the calculation of pension benefits to include the full pay received for all regularly scheduled work, while continuing to exclude overtime pay for hours in excess of an employee s normal work schedule. CONGRESSIONAL ACTION 03/15/16: H.R was introduced in the U.S. House of Representatives and referred to the Committee on Oversight and Government Reform. 10

11 KEY POINTS FEDERAL FIRE FIGHTER RETIREMENT Over 10,000 federal fire fighters serve our country every day protecting our forest, defense installations, VA hospitals and other vital federal assets. They deserve a retirement plan that fully recognizes the extent of their service. Federal fire fighters have been unfairly shortchanged in their retirement benefits because of a flawed calculation method used to determine their pension. These federal workers are required to work 19 hours of mandatory overtime per week which is not fully reflected in their retirement benefits. In addition to working mandatory overtime, these fire fighters have to put in 53 hours a week to earn the same amount that other federal workers earn in 40 hours. On an hourly basis, a GS-5/Step 5 fire fighter earns $11.62 per hour, compared to $15.35 earned by other federal workers at the same grade and step. This means fire fighters are receiving both a lower hourly wage and lower overtime wage for those same hours worked. The current system requires these brave men and women to work more hours for less pay across the board and refuses to treat fairly those additional hours worked when determining the retirement benefit. It is not uncommon for state and municipal fire fighters to have overtime included in the calculation of their pension. This bill doesn t seek to provide some new benefit, but rather to help create a sense of parity and fairness between federal fire fighters and their local counterparts. If the retirement benefits for state and local fire fighters can include overtime then it s only right that federal fire fighters receive comparable treatment. Pension benefits are traditionally determined by reflecting the full and mandatory amount of work performed by the employee. While DoD first responders earn overtime pay for hours in excess of 53 per week, those hours are mandatory and scheduled as part of their normal work week. And just as any other employee s normal working schedule is used to calculate their pension, so too should it be for federal fire fighters. A typical DoD firefighter works 106 hours of regular time and 38 hours of mandatory overtime on a bi-weekly schedule. At a pay rate of $11.62 per hour for regular time ($17.43 for overtime) for a GS-5/Step 5 employee, a fire fighter s salary at the end of the pay period would be $1, However, only $1, of that total is credited towards his/her retirement annuity - $ less than what they would receive if full overtime was included. Over a full career, this lost benefit adds up. 11

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13 INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS, AFL-CIO, CLC 1750 New York Avenue, N.W. Washington D.C Phone Fax Harold A. Schaitberger General President Thomas H. Miller General Secretary-Treasurer Jim Lee Chief of Staff Kevin B. O Connor Assistant to the General President Barry Kasinitz Governmental Affairs Director Shannon A. Meissner Deputy Director, Governmental Affairs Ben Timmins Governmental Affairs Representative David B. Billy Political Director Andrew R. LaVigne Deputy Political Director Ian Stublarec Political Representative Dean Cox FIREPAC Representative Thomas K. McEachin State Issues Coordinator