The peace-and-love press release issued, significantly, by the Atlanta City Council:
Atlanta Mayor Kasim Reed and Council President Ceasar Mitchell on Thursday applauded the Atlanta City Council for taking a major step toward approving pension plan reform. If approved by the Atlanta City Council next week, the legislation would avoid the need for personnel reductions and service cuts, and put the city on a path toward greater fiscal stability in FY2012 and beyond.
The Council voted 14-0 in favor of an amendment to the proposal recently put forth by Finance Executive Committee Chairwoman Yolanda Adrean and sponsored by Councilmembers H. Lamar Willis, Aaron Watson, Keisha Lance Bottoms, Alex Wan, Howard Shook and Ivory Lee Young. The amendment contains some features of the proposals developed by the Reed Administration and Councilmembers Adrean and Felicia Moore, with input from other council members.
“I strongly support the Atlanta City Council’s actions today in taking this major step toward reforming the city’s unsustainable pension plan,” said Mayor Reed. “This legislation would achieve my administration’s goal of providing employees with a retirement benefit the city can deliver while also saving millions of dollars for our city’s taxpayers.”
“Today’s vote shows that local government leaders can work together to solve tough fiscal problems while not breaking faith with public employees, many of whom have risked their lives and provided years of dedicated service to the City of Atlanta,” Mayor Reed added.
“The City Council’s acceptance today of a ‘common ground’ pension plan moves us closer to adopting reform that is a win-win for our taxpayers, city employees and the overall financial health of our City,” said Council President Ceasar Mitchell. “I applaud Mayor Reed for his unwavering commitment to this critical issue and commend the tremendous effort and leadership shown by the City Council.”
President Mitchell added: “The Mayor passionately called on the Council to expedite our work, and the Council asked for his collaboration in reaching common ground. In respectively meeting both challenges, collectively we are poised to embrace a pension reform plan that will unlock our City’s untapped potential. I enthusiastically endorse the proposed plan on the table not just because it is a compromise, but because I believe it is a plan that is fiscally prudent, legally defensible, functionally sustainable and humane.”
Under the amended proposal, current employees in the traditional pension plan would contribute an extra five percent of their compensation to keep their existing benefits with no other changes.
New sworn police and fire personnel as well as those below a certain payroll grade would be placed into a hybrid composed of a reduced traditional pension and a 401K-type plan. The traditional pension portion would have a one percent defined benefit multiplier and an eight percent employee contribution.
Employees would also participate in a 401K-type plan with a 3.75 percent mandatory contribution that is matched 100 percent by the city. These employees may also contribute an additional 4.25 percent that will be matched by the city. There would be a 15-year vesting period for the defined benefit portion and a five-year vesting period for the 401K-type plan.
In addition, the retirement age for new employees would be increased by two years. The retirement age for new sworn police and fire personnel would be increased from age 55 to 57. The retirement age for all other new employees below a certain payroll grade would be increased from age 60 to 62.
Today’s vote is the result of dozens of committee meetings, presentations, workshops, and employee sessions on pension reform over the past 18 months attended by Atlanta City Council members, employees, union representatives and the public.
Mayor Reed has made shoring up the city’s reserves, balancing the budget and safeguarding taxpayer dollars a top priority, second only to public safety. Shortly after his inauguration in January 2010, he appointed a Pension Review Panel to begin studying the city’s pension fund and make recommendations on how to address the problem.
Six months after taking office, the Reed Administration successfully took the first step toward pension reform by proposing legislation to reduce the multiplier for new employees. The multiplier decreased from three percent to two percent for sworn firefighters and police officers, and from 2.5 percent to two percent for the city’s general workers. The legislation also increased the vesting period from 10 to 15 years.
There will be a Special Called meeting of the Atlanta City Council at 3 p.m. on Wednesday, June 29, 2011 in the City Council Chambers.
- By Jim Galloway, Political Insider