(Memphis) Memphis City Council members are looking over a study from financial experts about the condition the city’s unsustainable pension plan and possible solutions.
We’ve already heard the pension plan was more than $680 million in the hole, but a new auditor’s report finds that will grow over the next few years.
“As long as we continue to drag our feet, the hole is going to get deeper and we are going to end up like our neighbors to the north in Detroit. The city of Memphis has underfunded the pension plan by $50 million dollars each of the last three years and $70 million in this last year’s budget,” said Councilman Kemp Conrad.
“We were to fund it, that and health care, it would be about a 50 percent tax increase or it would be a huge suck for vital city services,” Conrad added.
The current pension plan has employees contribute 8 percent and the city 6 percent.
Memphis Chief Administrative Officer George Little sent the study to council members late last week saying, “be assured that none of those options will result in employees losing a pension.”
“The problem is the investment returns haven’t been enough to sustain the expenses of the fund,” said Councilman Lee Harris.
“The question is, are we going to do it in a transparent and thoughtful way and make sure that all parties can participate,” added Harris.
City leaders are expected to meet with employee groups by the end of this week.
They also plan on meeting with city council members.
Mayor A C Wharton asked city employees for their input and said he would like to take action before 2014.