Memphis council reacts to Wharton's pension plan - FOX13 News, WHBQ FOX 13

Memphis council reacts to Wharton's pension plan

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    Friday, October 4 2013 3:43 PM EDT2013-10-04 19:43:45 GMT
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DOWNTOWN MEMPHIS, Tenn. (FOX13) -

Mayor A C Wharton said the city cannot afford its pension program and he'll present the city council Tuesday afternoon with a plan to deal with the program's financial shortfall.

Councilman Harold Collins said he wants an independent accountant to review the pension program before voting on anything.

Discussion of the city's pension program is going to dominate city hall, likely for the next year. Mayor Wharton and his administration will present a plan to deal with the pension shortfall and convert some city employees into a new retirement system.

Council members received a booklet packed with information Friday that outlines some details of the mayor's proposal. The city would contribute millions of dollars to the pension program over years in order to eliminate the system's unfunded liabilities.

In addition the city would reform the pension system.

City workers who are retired or who have worked for more than 10 years and are vested into the system would remain in the pension system, but employees who have been working for less than 10 years and are not vested, would be transitioned into a traditional 401k retirement program.

Mayor Wharton said this is necessary because reports estimate there is a nearly $700 million shortfall in the pension fund. A review by the Memphis Firefighters Association suggested the fund is short closer to $300 million.

Councilman Collins wants the city council to consider hiring its own accountant to run the numbers.

"I think the numbers should be verified," he said. "There is no way we should be making a decision about something that is as important as this and not have accuracy."

Councilman Collins said he'll be listening to the mayor's discussion when it's presented Tuesday afternoon. He's considering both what's best for the entire city and what's sustainable for the workers who are already in the system.

Tuesday's discussion is just the start of this debate. It will last well into April 2014's budget discussions. The outcome will affect the city of Memphis for decades.

City leaders say it's about protecting the city's finances and long-term fiscal outlook.

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