(Memphis) Memphis’ pension plan is underfunded, but it’s up for debate by how much.
Advisers to the firefighters union disagree with the city that the pension plan is $600 million in the hole.
They say it’s half of that and there’s money in the pension plan the city isn’t factoring in.
“There is about 10 percent of $2 billion that is not being recognized as part of that plan. Since you are at this decision point, I think it is very critical that be considered too,” said Flick Fornia, a pension adviser to the Memphis Firefighters Union.
City Finance Director Brian Collins says the range of differences is being worked out.
“I believe the actuaries exchanged ideas and information in the room today and I believe the gap is narrowing before your eyes,” Collins said.
City council members want to know how much money will be needed and if the $200 million, which is the 10 percent of the $2 billion in the fund, needs to be factored in.
“I am concerned because if that does count on our ledger, we are not as underfunded as has been reported,” Memphis City Councilman Jim Strickland said.
And the clock is ticking – the state may soon require governments to fully fund their pension plans.
Tennessee State Treasurer David Lillard and State Comptroller Justin Wilson were in Memphis Tuesday urging the city to take action, whether it means a pension overhaul, a 401-K plan or adopting a state plan.
“The main thing is to act on the pension system now and not defer it, not kick the can down the road. The legislation coming through the legislature will not allow that to be an option,” Lillard said.
“I believe the government ought to meet its obligations. We have employees who ought to get their pensions,” Wilson said.
“There is plenty of room for debate, but at the end of the day, no longer do we have the option to say we know what we are supposed to pay but we are not gonna pay it,” Memphis Mayor A C Wharton said.
The City Council says the more money already in the pension plan, the less money the city will have to put in yearly. That means less money from taxpayers.
The City Council’s pension adviser will make a recommendation to the council next month, and a vote is expected in June.