City, unions battle over pension plan | News
(WMC-TV) - The City of Memphis is catching flak over a proposal to make cuts to its employee pension plan. City leaders say the debt caused by the current pension model is unsustainable while union leaders say the proposed cuts will put the public at risk.
Memphis officials say something has to give. They say the current pension model caused $531 million in unfunded liability and because of that, cuts are unavoidable.
But Michael Williams, vice president of the Memphis Police Association, says city residents cannot afford to lose qualified officers.
"You're going to get what you pay for," he said. "You're not going to get the quality of officers that the citizens actually deserve."
Memphis Fire Association President Larry Anthony says a pension is the one draw for public safety employees.
"Why would they want to come here for probably a lesser paying job than other places in the country," asked Larry Anthony, Memphis Fire Association president.
The cuts would affect all city employees who are not yet vested, including 1,300 police officers and 600 firefighters.
The proposal would change retirement from 25 years on the job - to age 55. The accrual rate of interest an employee can collect from the pension plan would drop from 2.5 percent to 2.25 percent. And an early retiree would lose 5 percent of their pension for every year left on their tenure.
The unions and the city have a meeting September 9 with their actuaries to crunch numbers. They hope to delay the final vote until the actuaries update the numbers with one another.
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