VOL. 129 | NO. 244 | Tuesday, December 16, 2014
City Council to Consider Pension Alternative
By Bill Dries
Memphis City Council members again have final votes pending Tuesday, Dec. 16, on several possible sets of changes to the city’s pension plan.
Memphis City Council members again take up competing pension plan proposals Tuesday, Dec. 16, including one by council member Wanda Halbert, left. Council member Myron Lowery, right, is expected to revive his plan as well.
(Daily News File/Andrew J. Breig)
The last meeting of 2014 for the council again finds the body poised to make final decisions on the last in a set of two changes this year to the benefits city employees and retirees receive.
The council approved health insurance changes in the summer with several amendments following that vote.
Actuaries have told city leaders the city’s liabilities for the health insurance and pension benefits are each unsustainable without changes.
The council meets at 3:30 p.m. at City Hall, 125 N. Main St. Follow the meeting and get updates on the committee sessions earlier in the day at @tdnpols, www.twitter.com/tdnpols.
Two weeks ago, council members delayed a final vote on Memphis Mayor A C Wharton Jr.’s proposal to switch all new city hires in 2016 as well as city employees with less than 10 years of service to a hybrid pension plan that mixes a market-based retirement account with a defined contributions plan. City employees with 10 years or more of service would remain vested in the city’s existing private contributions plans.
An alternative by council member Myron Lowery to only include new hires in the change to the hybrid plan was amended two weeks ago, but no final vote was taken on the new alternative put forth by council member Wanda Halbert.
Halbert’s plan would include new hires in the switch to the hybrid plan as well as city employees with less than 7 1/2 years of service.
She made the proposal after saying city employees should be expected to make sacrifices toward making the liability sustainable for the city. Her proposal is based on detailed discussions with Segal Consulting, the Atlanta actuary hired by the council earlier this year to advise it. She also used numbers from PricewaterhouseCoopers, the actuary firm used by the Wharton administration.
The consultants had offered council members a range of options, including what would happen if the new pension plan included employees with five, seven or eight years of service.
A city employee is considered fully vested in the pension plan with 10 years on the job.
Council members in the last month have been discussing whether the city should keep contributions unvested city employees made under the existing plan if they move to the hybrid. Some on the council have advocated a “sweep” of those contributions into a fund that would be available to unvested city employees when they retire.
Halbert’s plan to include those with less than 7 1/2 years of service in the switch had eight votes on the 13-member council two weeks ago. But a final vote was delayed.
Council members discuss it and the other pension options further at an 8:30 a.m. committee session in advance of the afternoon vote.
Memphis Fire Fighters Association President Thomas Malone vowed that his union and other municipal unions would sue the city if Halbert’s plan is approved.
Meanwhile, Lowery is expected to try to revive his alternative at Tuesday’s session.
Council members have their first discussion about a proposed Beale Street Tourism Development Authority at a 10 a.m. committee session.
The Wharton administration proposal surfaced late last week and is not scheduled for a council vote Tuesday.
And council members get the latest update from Memphis Police Department brass at 11 a.m. on the city’s rape kit backlog.
The Tuesday council session also marks the last meeting in Jim Strickland’s one-year tenure as council chairman. Lowery becomes chairman with the new year.