City fined $1.6 million for pension glitch

By ERIC STIRGUS

The Atlanta Journal-Constitution

Atlanta last week paid about $1.6 million in penalties and interest for making late payments last year to the city’s General Employees pension plan.

City workers also put $894,000 in the wrong pension fund, Chief Financial Officer Jim Glass said Monday.

Glass said he is considering disciplinary action against workers responsible for making the payments. The monthly payments were late by three days to a week, Glass said. He also said issues with computer software installed at the end of 2007 caused some reporting problems.

The Internal Revenue Service imposed the $1.6 million in penalties and interest. The city is requesting an abatement of the penalties, but a city statement does not explain why the city believes the abatement is in order.

Atlanta, like most governments, is struggling financially. City leaders blame the bulk of the city’s money troubles on the recession. Revenues are $2.6 million below projections since July.

Some say another problem is the amount of money the city is investing in employee pensions. Atlanta spent about $100 million — 17.5 percent of its general fund budget — on pensions during the 12 months that ended June 30. The City Council approved pension increases in 2001 and 2005, in part to make up for years of underfunding the pension plans.

The Atlanta Journal-Constitution reported Sunday on the city’s pension challenges as part of its AJC Atlanta Project. The report is online at AJC Atlanta Project.