MEMPHIS, Tenn. — Wednesday, Mayor A C Wharton told WREG he welcomes any and everyone’s help to solve the city’s pension problems. An estimated $600 million deficit in the pension forced the city to raise health care premiums.
Memphis made big cuts to health care coverage for all city workers and retirees to cover the city’s pension problems. However, protesters want to know why the money is not already there.
Mayor Wharton said it’s complicated.
“It goes back 25 or 30 years to the very design of the plan.”
A change in state law changed how the city approached the budget. It forced more money into the pension and because of the city’s poor planning put the financial future of tens of thousands of workers and retirees in danger.
Wharton said the problem started before most current workers were even born.
“You’ve got a plan that was designed in 1948, and things have changed so much,” he said.
Financial planner Martavius Jones said the city set aside smaller amounts of money than what was needed since at least 2008.
“For the city of Memphis, they were not putting in the required contribution to keep up with what was required. So we were putting in less than what was required in order to shore up the plan.”
He said, even though the ball was obviously dropped, no one person or even administration is solely to blame for the current situation. Instead, he said there are plenty of people to blame for getting the city in this jam. He also believes it will take that many people to get us out.
“This community has to be prepared for more taxes. Employees have to be prepared to pay more for their retirement in order to get beyond this.”
Jones said another big reason why we’re facing pension problems now is that people are simply living a lot longer than they used to.