Portland Audit Suggests Moving Public Safety Employees to Workers’ Comp

By | June 24, 2011

A Portland, Ore., audit is recommending the city move firefighters and police officers currently covered by the City of Portland Fire and Police Disability and Retirement (FDPR) system into the city’s workers’ compensation program. Doing so would help to reduce the duplicative efforts by having two employee disability programs, and would help to reduce costs in the taxpayer-funded FDPR.

“As a basic business practice, [maintaining two systems] is not cost-effective or administratively efficient for the volume of claims generated by a mid-sized employer with approximately 5,000 employees,” the report said.

Among the other problems created by having two disability systems are:

  • By maintaining the FDPR system, Portland is giving up state subsidies for returning injured public safety officials to work, because the subsidies are only available to employees covered by workers’ compensation.
  • Unlike city employees covered by workers’ compensation, disabled public safety employees don’t have reinstatement or re-employment rights with any other city bureaus, limiting opportunities to return the injured to work.
  • A separate FPDR property tax discourages cost control.
  • Once sworn in, a public safety officer who is injured while on probation, and is permanently restricted from police or firefighting work, is eligible for FPDR disability benefits until mandatory retirement age, but is ineligible for light duty jobs at the police or fire departments because they were on probation at the time of the injury.
  • Under the workers’ comp system, there is a formal process to determine if an employee is permanently disabled, which if determined, entitles the injured worker to receive a monetary payout to close the case. No such PD award exists under the FPDR system, allowing injured workers to collect disability benefits until retirement.

In addition, because disability costs are not paid out of the base General Fund budgets of the Police and Fire Bureaus, there is little financial incentive for the bureaus to control disability costs, the auditors said.

“If no action is taken, property taxes will increase and other government services will continue to be eroded as FPDR requires an increasing share of local government tax dollars,” the report noted.

To view Portland’s audit report, visit http://www.portlandonline.com/auditor/index.cfm?c=53775&a=353325.

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