Pension Auditor Scorches Jacksonville Fund As Mismanaged, Gives It D-Minus, Calls For Investigation

Board members are paving the way to fill the long-vacated No. 2 position at the beleaguered Jacksonville Police and Fire Pension Fund in spite of orders from the city to leave the spot open.
It’s unlikely that the move paves the way for Bobby Deal, the former long-time chairman of the pension fund board who once was considered the heir-apparent to the No. 2 role. Though anything could change with a board vote, board members previously agreed that the fund was in need of some fresh perspective and someone with an advanced degree or degrees.

Advertisements for the deputy director job as well as the No. 1 spot of executive director should be ready in the coming weeks. John Keane, the 72-year-old executive director of the fund, has said he will retire after pension reform is complete.

The City Council is expected to vote on the amended version of the pension reform bill in the coming weeks. The pension reform package specifies that the new executive director must have an advanced degree in finance, economics or accounting, something Keane does not have.

Even though more stringent education guidelines for the deputy director position were not included in pension reform legislation, a majority of the board of trustees — after some resistance — agreed to beef up the qualifications, said Walt Bussells, chairman of the pension board.

“We need a fresh start and a professional start,” Bussells said.

Bussells said even though the pension fund is planning to advertise for the No. 2 spot, that doesn’t mean the board necessarily will fill the position with its potential annual salary of $60,000 to $112,000. There are about seven employees at the pension fund, which has operated without a No. 2 for more than two years.

Deal, a former assistant chief who ran the Police Athletic League, retired in July, and who finished his high school education while in the Army, applied for the No. 2 position in December 2013.

He was a board member of the pension fund for 17 years and before that served eight years on the pension fund’s advisory council.

Even though the position had been advertised previously, the entire process is starting over, Keane said.

Keane said Friday he did not know if Deal would have to reapply for the position should he still be interested. Deal did not return a phone call seeking comment.

Over the summer, Deal was the subject of two reports by The Florida Times-Union: “The $5 Million Cop” and “Too Much of a Good Thing?”

The first showed how Deal was set to earn almost $5 million over the next 25 years just in retirement benefits. A companion piece to “The $5 Million Cop” revealed how Deal was hoping to secure the No. 2 spot.

The follow-up piece, “Too Much of a Good Thing?” revealed how Deal and a few others skirted city rules and stayed in the Deferred Retirement Option Program longer than law allows. Because of that, they are now expected to be overpaid close to $2 million in future retirement benefits. Deal stands to earn $610,654 more in DROP payments than under strict interpretation of the city code.

About the time of the newspaper’s reports, the council was taking issue with the pension fund’s budget. The council voted against authorizing filling the vacant No. 2 spot.

News that the pension fund could be gearing up to fill the deputy director position didn’t sit well with City Councilman John Crescrimbeni.

And it also didn’t surprise him.

“That’s the typical M.O. [modus operandi] for the police and fire pension fund; they just do what they want to do,” Crescimbeni said.

Both the City Council president and Keane sought an attorney general’s opinion to settle the dispute over the pension board’s authority. In a letter sent recently, the attorney general’s office said it did not want to issue an opinion, but reminded the parties that in 1992, when the same question came up, it sided with the pension fund.

CHANGES AHEAD

Pension board members on Friday agreed that the executive director position would pay no more than $200,000 annually the first year, $109,000 less than Keane is making. There was no detailed discussion on the salary range for the deputy director position, though the job previously had been advertised to pay between $60,000 and $112,000 annually.

As for the No. 1 position, salary and educational background won’t be the only notable differences between Keane and his successor.

Keane’s replacement will be eligible to join either the city’s pension plan or a defined contribution plan that mirrors the city’s.

Keane created his own special pension, something the city’s legal arm has said is unlawful. That pension is fully funded even though the pension fund that Keane oversees is precariously underfunded at 43 percent.

State Sen. Robert Bradley, R-Fleming Island, said he is willing to sponsor a bill that could give City Council the muscle some have been looking for.

“I’m looking for direction from the city — whether it be the mayor or the council or both — regarding any authority that the Legislature could provide to do what they need to do to make the situation right,” Bradley said Friday evening.

Keane’s pension had been growing for more than a dozen years before anyone on the council knew of its existence.

Should he retire in the upcoming months without a challenge to his pension, he’ll earn about $213,000 in just that single pension fund in the first year.

That six-figure pension won’t be Keane’s only source of retirement income.

When Keane leaves work he can expect to earn about the same amount as a retiree as he earns today, $309,504.

Keane currently is drawing $65,000 a year as a retired firefighter. He also pays into and earns Social Security — something police and firefighters in the pension fund are not permitted to do. Social Security pays him about $31,000 a year.

Combine all three, and Keane will earn about $309,000 in his first year of retirement.

From The Jacksonville Times-Union