The deal is struck: Atlanta pension overhaul agreement reached

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

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25 comments Add your comment


June 23rd, 2011
7:49 pm

Thanks for calling this issue to question, Mayor Reed. I’m proud of our City Council as well.

Silent Majority

June 23rd, 2011
7:52 pm

It’s been years since City of Atlanta government has been able to put egos aside and accomplish something this big. True leadership at work here.


June 23rd, 2011
7:55 pm

“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.”

That’s what it’s all about. This could warm the heart of the harshest cynic. Great work!


June 23rd, 2011
8:03 pm

I’m just glad all the drama is over. It was great theatre, but it was time for the curtain to close on that act. I’ll be a lot slower to criticize our City Council after this legislation is passed. How you get all those personalities to agree is beyond me, but I’ll take it.

Mayor M. Kasim Reed Fan

June 23rd, 2011
8:05 pm

Did someone say consensus builder?

The Snark

June 23rd, 2011
8:08 pm

Notwithstanding the Rush Limbaugh crowd, self-government is hard work and its takes skills and a sense of responsibility. Kudos to the Mayor.


June 23rd, 2011
8:09 pm

Shared Responsiblity

June 23rd, 2011
8:16 pm

The Phoenix arises again. Way to lead the charge on a nationwide problem Atlanta.


June 23rd, 2011
8:23 pm

Well Done Atlanta


June 23rd, 2011
8:23 pm

I guess it is too much to ask that our federal government take note and not kick our national debt ceiling problem further down the road and actually address it now.

Congratulations to Mayor Reed and the Atlanta City Council.


June 23rd, 2011
8:40 pm

but still…62? really? retirement age should be raised to a lot higher than that…


June 23rd, 2011
9:14 pm


This is all about the defined benefit plan which is mainly for the lower paid blue colar workers. A lower retirement age is justified (actuarialy speaking) because their life-spans are shorter on average.


June 23rd, 2011
9:16 pm

I’ll be happy when this is over so we can focus on managing the rest of the City’s issues.


June 23rd, 2011
9:52 pm

@ SWATS Guy- What no one mentioned during this entire episode, was that the majority of this council cast the votes in 2001 and 2005 that got us into this entire situation. With the exception of the newly elected officials, Martin, Moore, and Shook, the rest of the Council should be pushed on out the door.


June 23rd, 2011
11:14 pm

translation…more new money for us to piss away on something else our cronies want

Atlanta Employee

June 23rd, 2011
11:30 pm

How did Mayor Reed prevail??? We as employees came up with the idea to increase our contribution by 5%, and other concessions. If you remember, the Mayor wanted to turn over EVERYTHING to wall street. I would call it a compromise between the employees, and council.

Question Man

June 23rd, 2011
11:34 pm

Isn’t this “pension reform” just kicking the can down the road with untenable assumptions and politics trumping financial common sense? How many people will claim to be surprised when the City is gasping for air five or so years down the road and real pension reform is put back on the table?

The Centrist

June 24th, 2011
6:07 am

How long has it been since corporations started phasing out pensions for 401K’s. I think it has been more than five years.

mehlman rings twice

June 24th, 2011
8:34 am

Actually pensions are a no-win proposition for cities anyway. They basically they became a weath redistribution program for those who benefitted from society’s view at the time that employment (and retirement) was a birth right based on race and to the detriment of those who really did the heavy lifting.


June 24th, 2011
9:34 am

Well had it not been for Ceasar Mitchell pushing for that 10th vote we wouldn’t be here having this discussion on who to give credit too.


June 24th, 2011
10:19 am

I wish they’d go one step further and exempt themselves as legialators from the City’s pension program. Legialators at all levels, from city to county to state to federal, ought not get pensions for their time in that service. In addition to removing what could be considered a real conflict of interest, it could also have the effect of keeping peoople from treating legislative service as a career.


June 24th, 2011
11:25 am

These are prudent financial steps that needed to be taken. Even the new, revised pension/401-K/retirement age provisions look pretty attractive compared to what most workers in the private sector get.

If the City workers don’t like it let them leave and find employment elsewhere.


June 24th, 2011
12:46 pm

dump pensions for these overpaid, lazy atlanta workers and make them use 401k plans like everyone else. The city is broke and can’t be paying for guaranteed retirement benefits for these “workers.” End all pensions now!!!


June 24th, 2011
2:21 pm

I thought there was a federal law that private pensions must vest in five years and public pensions in ten. How are they getting away with a 15 year vest?

Now that the pensions have been reduced, are they going to pay market rate for their employees? Most would get higher hourly wages in the private sector.

Casual Observer

June 24th, 2011
10:55 pm

It should be noted that this was NOT the Mayor’s plan. This was not the Mayor’s win–he did not have the votes to get what he wanted. The Council and the city workers developed this and Council President Mitchell provided not only the guidelines, but the leadership to get the votes. While the Mayor will get the credit, and I applaud him for making this a major issue, the Council and Council President Mitchell deserve the credit for passing reform.