VOL. 129 | NO. 215 | Tuesday, November 4, 2014
Council to Vote on New Pension Proposal
By Bill Dries
Memphis City Council members start all over Tuesday, Nov. 4, in their votes on pension reforms.
A pair of ordinances representing a revised pension proposal by Memphis Mayor A C Wharton Jr. are on Tuesday’s agenda.
(Daily News/Andrew J. Breig)
A pair of ordinances representing a revised pension proposal by Memphis Mayor A C Wharton Jr. are on Tuesday’s agenda for the first of three readings. They replace another set of ordinances that had been set for final votes at the last council meeting in October.
Wharton’s administration withdrew them and submitted a “hybrid” proposal that would allow new hires and those with less than 10 years on the job to enroll in a two-part plan that includes a professionally managed market-based fund as well as a 401(k)-like plan.
Wharton’s amended pension proposal would allow employees to contribute 2 percent of their salary to the market-based plan, with the city contributing between 3 percent and 16 percent of salary depending on the employee’s position and years on the job. An employee could contribute another 6 percent to the 401(a) plan, with the city contributing 1.5 percent of that employee’s salary.
Wharton’s plan applies to new hires and city employees with under 10 years of service. Council member Myron Lowery’s plan to apply it only to new hires is also up for first reading Tuesday.
Employees can currently contribute 8 percent of their salary to the city’s pension plan, with the city contributing 6 percent.
City employees currently have a defined benefit pension plan. Wharton proposed earlier this year a switch to a defined contribution plan similar to a 401(k) for all new hires and city employees with less than 10 years of service who are not vested.
Retirees and employees with 10 years or more of service would not see their pension benefits change under either the original proposal or the new one Wharton unveiled last month.
The council meets at 3:30 p.m. at City Hall, 125 N. Main St. Follow the meeting and updates from the council committee sessions earlier in the day at @tdnpols, www.twitter.com/tdnpols.
The first-reading vote on the three new pension ordinances is on the council’s consent agenda, meaning no debate is expected.
Council members are awaiting an analysis of Wharton’s new proposal from Segal Consulting of Atlanta, the actuaries the council hired separately from the administration’s actuaries to advise the council on the changes in city employee benefits.
Both sets of actuaries have told the council that the city’s liabilities for pensions and for health insurance benefits are unsustainable under current plans.
Whatever pension changes the council might ultimately approve would not take effect until 2016.
The council approved in June a set of changes to health insurance coverage that the administration has since modified. Those changes take effect this January, with the city’s open enrollment period beginning this week.
City retirees filed suit in Shelby County Chancery Court over the city’s decision to end its 70 percent subsidy of health insurance premiums. In a ruling Friday, Chancellor Walter Evans denied a motion to block the end of the subsidy pending the outcome of the lawsuit.
In planning and zoning items Tuesday, the council takes up the move of a used car lot on Elvis Presley Boulevard to a lot closer to Winchester Road.
The 3510 Elvis Presley Blvd. location for the Hot Wheels dealership would be north of the new Guest House at Graceland, a $70 million, 450-room resort-style hotel being built by Elvis Presley Enterprises.
The council delayed a vote on the car lot at its last meeting in October.
The council also votes Tuesday on the first reading of an ordinance that would permit another used-car lot on the southwest corner of Summer Avenue and Vaughn Road on land that is currently single-family residential.
The proposed car lot is south and east of other used-car lots on Summer.
Council members are also scheduled to discuss tax abatement incentives, including payments-in-lieu-of-taxes, at a 10:30 a.m. committee session. The discussion item specifically involves incentives the city granted Cargill several years ago. In September, Cargill executives decided to close by the end of this year a Memphis corn mill that employs 440 people. Executives announced in July they will build a $45 million grain handling and shipping facility in West Memphis.