Memphis council mulls Wharton's pension proposal - FOX13 News, WHBQ FOX 13

Memphis council mulls Wharton's pension proposal

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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 painted a gloom and doom picture for the city's finances Tuesday and said only pension reform will fix it.

He presented a fix to the city council but the unions don't agree.

MORE: City of MemphisPension Fund website

Mayor Wharton is proposing doing away with the pension system as we know it and turn it into a 401k-type of plan. This would apply to new hired and anyone with less than 10 years on the job.

About 2,500 city workers could lose their pensions and instead have 401k-type retirement plans.

MORE: Memphis council reacts to Wharton's pension plan

Mr. Wharton said this plan has to change because the current pension plan is underfunded by about $700 million. He said the city cannot go on like this and it could result in State oversight of the budget and downgrading of the city's credit rating.

A review by the Memphis Fire Fighters Association IAFF Local 1784 suggested the fund is short closer to $300 million that can be solved without doing away with the pension program. The firefighters union said the pension is one reason good candidates chose to work in Memphis.

The fire fighters union was also upset because they were not given then opportunity to speak at the meeting.

Councilwoman Wanda Halbert wanted to know why the city waited so long to take action.

"The person who needs to tell me about the city of Memphis pension problem is the HR director, the mayor and the finance director," she said. "But thank you for that."

"To say the director of finance or the mayor has never come to us, or we've never talked about the pension issue?," Councilman Kemp Conrad said.

"Never like this," Councilwoman Halbert said. "At this point my commentary is directed toward the administration."

Council members and the administration will meet over the next few months to discuss the proposal. It is expected to be voted on this summer as part of next year's budget.

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