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Police Contract Includes Raises, Some Changes to City Benefit Costs

An arbitration award was announced today for Philadelphia's police union. The five-year contract grants raises to officers, but includes some changes to healthcare and benefit programs – long cited as a crippling expense for the city.

"I think it addressed the FOP concerns in areas and the city's concerns in areas," said FOP President John McNesby. The union, who must settle through arbitration becasue they cannot strike, had been without a contract since June 30. This is the first contract deal for one of the city's four municipal unions.

Full details of the award have not been released, but the contract includes a 7 percent raise over the next three years, with the option for further increases in the following two years, said McNesby.

On the benefit side, the FOP says members will not pay an increased contribution, but the union will switch to a self-insured health care program, which the city expects will save money. The city will go to that plan in July. Until then, mayoral spokeswoman Maura Kennedy said the city will pay $965 per month for each member, which is less than the $1165 per member that the city has been paying. She said that in July, they expect the per-person payment will be even lower.

For retirement, new hires will have the option to pay an increased premium to remain in the union's traditional pension program, or go to a hybrid plan with both a 401K and a lower benefit pension – another change Kennedy said would save the city money.

McNesby said members won't see any change to their health benefits and stressed that no one will have to do a hybrid retirement plan if they choose not to.

The contract also includes a shift in the longtime city residency requirements for officers. In 2010, all officers in the Deferred Retirement Option Plan (DROP), and those eligible for DROP can move outside the city. And by 2012, all officers with more than five years on the job may move out.

This is the first contract for one of the city's four municipal unions. Citing the city's fiscal woes, Nutter had asked for contracts with no raises and a total savings of $125 million over five years. He is set to hold a press conference at noon to talk about the award.