VOL. 129 | NO. 128 | Wednesday, July 02, 2014
Council Delays Action on Pension Plan Changes To October
By Bill Dries
Memphis City Council members voted Tuesday, July 1, to delay final votes on a set of ordinances to change the city’s pension for new hires and employees on the job for less than 10 years.
The council had planned to vote on the pension changes at its July 15 meeting. But the council moved to delay it further after a council day briefing of several hours from Segal Consulting of Atlanta, the consulting firm hired by the council specifically to advise it on pension plan changes proposed by Memphis Mayor A C Wharton Jr.
The delay means council members are considering alternatives to Wharton's plan.
Wharton has proposed switching unvested city employees to a defined contributions plan that would be similar to a 401k plan. However, city employees do not participate in the Social Security program or get benefits from Social Security when they retire.
The Segal consultants evaluated Wharton’s proposal as well as several hybrid plans between defined contributions plans and defined benefits plans. The hybrids involve possibly creating separate plans for public safety employees in the fire and police departments as well as enrolling other general city employees in Social Security.
The consultants told council members they should weigh carefully the proposal to convert city employees to a defined contributions plan with no Social Security coverage. They also said there is no requirement to make such a change with the start of the new fiscal year which began Tuesday.
The council also delayed to the first meeting in October a final vote on changes to the city’s Deferred Retirement Option Program.
Meanwhile, a bid by council member Wanda Halbert to suspend the rules at Tuesday’s council session as a first step toward reconsidering health insurance plans approved by the council last month failed on a 6-6 tie vote.