Instead of selling bonds now, APS will reduce its pension fund payments in the short term. But the district is still seeking a long-term solution for its pension woes — and that solution could still include selling bonds, said Jason Esteves, co-chairman of a task force studying the issue.
“This resolution by no means is necessarily the end of the conversation,” Esteves said Monday evening.
Reducing payments in the short term will allow the district to avoid cutting spending in other areas while the task force works out a long-term solution to APS’s $550 million unfunded pension liability, Esteves said.
That long-term solution could also include options such as increasing the district’s tax rate or limiting new pension members, Esteves said, though the latter option would be unlikely to produce significant savings because most participants in the pension are retired.
Monday’s APS vote means the district will delay fully funding the pension fund by four years. APS will pay less into the pension fund over the next 11 years than currently planned, but will make up for those savings in the following years, eventually paying an additional $30 million.
The pension debt has been building for at least 35 years. When many Atlanta teachers transferred from the school pension plan to the Teachers Retirement System of Georgia in the late 1970s, they brought most of the school retirement plan’s assets with them. About 3,100 active and retired school system employees, many of them bus drivers and custodians, remain in the pension plan, which is overseen by a city of Atlanta pension board.
Esteves said he expects the pension task force to produce a recommendation for a longer-term solution by the end of this year.