State Could Step In On Memphis Pension Problems

(Memphis) There’s a new twist in the future of pension money for city workers like fire and police officers.

One Memphis city council member says the state could step in soon, and that may not be a bad thing.

The city says the fund for retired workers is more than $680 million short, but the unions claim it’s hundreds of millions less.

It may be a new year, but the same old problems are popping up at city hall.

There is no resolution on how much money the pension fund is short, with the mayor’s office saying one thing, but the unions arguing a completely different number.

No solution can be made until an exact number is agreed upon, and that could mean the state stepping in.

Councilman Kemp Conrad’s calls the fiasco an embarrassment.

“The fact that we’ve let it go this long and can`t solve it. You know, I don’t blame them. If I were them, I would not want a bankrupt city that the state now has to get here,” said Conrad.

No word on when exactly the state may step in, but Conrad thinks it’s a good idea.

“We should have been putting in $80 to $100 million of the last several years. We`ve been putting in $20 million so there’s a big gap. So what I think the state will do is mandate that over the next three to five years we get up and fully fund our pension plan,” said Conrad.

Police Association President Mike Williams claims the city is not using national standards for calculations, jacking up the total in a ploy to push a 401k system.

He calls that disastrous.

“After they get all of this quality training in one of the most violent cities in the nation and find themselves marketable, which is what they’re doing now, they’re going to go to other places and take that 401K with them,” said Williams.

Though there’s no exact deadline on when this needs to be worked out, council members seem to think they’ll come to an agreement by budget time this summer.

17 comments

  • Joe

    the pension funds were short funded because the city cant afford to fully fund them each year……which means we were never able to afford the union demands that pitifully weak politicians caved to in the first place.

    wow….I hate a union……they poison every city they get their hooks into

    don’t worry tho….city after city is having the same issue…..unions and pensions are both going by the wayside

    the gravy boat days of padding your hours during your last couple of years to get a higher pension payout are over my friends

    think we want to pay you 80-90 percent of your salary to sit on your butt for another 40 years after you retire at 50 or earlier…..?

    somewhere along the way….all of you forgot what it means to devote your life to public service

    • miles

      No Joe. Public service does not mean work for years, even decades for a job only to have the rug pulled out from under you. Public service is not free labor. The unions here are only pointing out what many council members agree, was some serious mismanagement. If you went to work tomorrow and your boss told you after say 22 years. ” I’m not going to pay you a match on your 401k for the time you have been here, and you had to go explain to your wife and kids that you will have to work until you die to make ends meat, you might have a different perspective. The pension fund was fully funded with extra money in it in 2007, per the mayor himself. That means it worked for over 30 years just fine. The pension allows the city to not contribute to social security which is more than what they were supposed to be contributing into the pension. And yes I said contributing the workers pay more into the pension than the city does. You may just be hating on others, that’s your right. But now you know a little more about the situation.

    • miles

      oh and by the way the city pension is not much more than half your salary. so if your making 30k a year at work, do the math. And they get not social security from a pension job. If one thinks less than 17k a year with no social security is a lavish retirement then one should write a book on money management. Just an example.

  • Nonya Bidness

    The promises made by the city mean nothing. Now that cities are going to bankruptcy it means politicians can promise the moon and when it comes time to collect they can plead poverty.

    There is another name for Memphis city workers ……. SUCKERS!

  • Roger Sawyer

    Joe, that was the most ignorant and uneducated comment that can be stated. Before you show anymore ignorance, be better informed

  • Gray ghost

    The city isn’t Enron! You dumb 4$$. They can’t just disappear like you “joe”. The only suckers I know of are the citizens. They’ve elected the people in which you serve. Though you aren’t smart enough to realize, they are there to serve the citizens. When all the workers are gone, who is going to serve the city? You? Think not! The elected officials? Guess again? Nobody! The private sector contractor that is there strictly for a profit. I don’t have a dog in this fight but you sir are one of the reasons this country is in the shape it is. Maybe because you were not good enough to be a civil employee. You settled for a private firm. Again, padding your empty pocket? Looking at what the city employee pensions are, they aren’t what you quoted. Now the mayors and city councils pension are very lavish. Even as your mayor currently collects a pension from the county, his pension benifits are over the top. Btw, they are not talking about cutting his pension, only the workers. By cutting the upper administrations by a third would pay quit a bit toward the debt they have occurred. Sad thing is, the citizens will be the ones paying it, as they laugh all the way to the bank in Jamaica. Moral here is: read and understand what the problem really is before you open your mouth and prove your ignorance. It has nothing to do with the unions. The mayor isn’t part of the city’s union. Nor is the pension.

  • Tim

    Our monetary policy has bonds paying basically zero percent interest. Every pension fund in the country is in peril. Couple that with the monumental stupidity, childishness, and self centeredness of the our city clowncil members and these city workers (most who voted for these idiots) are screwed.

  • miles

    No Joe. Public service does not mean work for years, even decades for a job only to have the rug pulled out from under you. Public service is not free labor. The unions here are only pointing out what many council members agree, was some serious mismanagement. If you went to work tomorrow and your boss told you after say 22 years. ” I’m not going to pay you a match on your 401k for the time you have been here, and you had to go explain to your wife and kids that you will have to work until you die to make ends meat, you might have a different perspective. The pension fund was fully funded with extra money in it in 2007, per the mayor himself. That means it worked for over 30 years just fine. The pension allows the city to not contribute to social security which is more than what they were supposed to be contributing into the pension. And yes I said contributing the workers pay more into the pension than the city does. You may just be hating on others, that’s your right. But now you know a little more about the situation.

  • WritingOnTheWall

    Bankruptcy. Democrat controlled cities are getting out of their obligation to pay into pension funds by declaring bankruptcy. Detroit has already done it, Chicago will do it and Memphis will not be far behind. ALL Democrat controlled cities. ALL of them.

  • Don

    It would help if the Governor would assign someone to come to Memphis city hall and clear all of the sticky fingers and send them to jail. That would clear up a lot of this mess and help the overburdened tax payers.

  • MrPeepers

    Nothing wrong with 401k’s, but if they mess with the city pension system, they need to return any money contributed back to employees who are forced out or opt out. With interest.

  • Fed up

    What the city is calling an “unfunded liability” is actually
    how much money the pension plan would need if EVERY city employee was to retire in the morning with a full 25 year pension. This is possible! Everybody will not have the se never of years service and even of the big earthquake hit all employees would not quit.
    This pension plan has worked very well since 1948. On 1978 the plan changed and reduced the surviving spouses’ payments by twenty-five per cent. When the city council voted to give themselves a TWELVE YEAR pension with no minimum age to draw it, they creates a problem called GREED. In previous years part time employees could not belong to the plan. Guess who changed this?
    The city has not been paying into the plan as required by city charter. If the city takes away the pension for new hires the payment into SS WILL BE higher than what the payment is for the pension and it will be mandatory to pay this. It seems that some elected leaders do not have the skills, knowledge or abilities to be where they are
    Before critiquing the pension plan some of you need to research what you are commenting on so an not to show you rear-ends.

  • Fed up

    In addition for the low level information people complaining about the union demands. The pension plan was started in 1948 way before the union came into existence. The union agreed to the reduction of pension payouts to surviving spouses in 1978. The reduction was TWENTY-FIVE per cent. This helped the soundness of the plan.
    In addition there is over TWO BILLION DOLLARS in the pension fund. If the pension lost twenty million dollars a year or would still last over 100 YEARS! The only problem is that the city doesn’t want to pay onto or anymore. If the city chooses to pay social security it would cost a lot more and the federal government would MAKE the city pay its share!

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