MEMPHIS, Tenn. -- The Memphis City Council is one step closer to deciding on pension plans for city workers.
The council met in an executive session to go over the options with a consulting firm.
It was the last chance for the council to get advice on pension plans for city workers.
Segal Consulting gave council members 59 pages worth of research, outlining the pros and cons for the different pension options.
Councilman Harold Collins said, "Their report showed that the mayor's plan would cost the city and the taxpayers more money."
That would be the Defined Contribution Plan, where the city and employee would each contribute eight percent and the investment risk would lie solely with the worker.
Collins said it would come with a hefty price tag, anywhere between $3 to 7 million more.
That is money he said the city should not be spending on pensions, especially considering their recent cuts to city workers' healthcare subsidies.
"If we can't find money to take care of the most vulnerable people in our community, then we need to be saving every penny we can."
Instead he said it should be going towards the city's Annual Required Contribution or ARC.
"The goal is to find the revenue to pay our ARC, which is paying out bills. Once we do that, we need to figure out what's the best plan for our citizens and our employees."
Other options are a Defined Benefit Plan where the city takes the investment risk and a Hybrid Plan where it is shared.
No decisions have been made and it will take several more months before council members decide what to do.
Councilman Collins pointed to a consultant’s report about the complexities of changing the current pension plan when he said, “People who wear shirts and ties to work can manage their money much better than people who do the grunt work.”
The report by Segal Consulting said financial experts should handle retirement plans because it’s too confusing for most people, especially blue-collar type jobs.
The council will discuss the mayor's proposed pension plan again on October 7.