New Atlanta pension plan surfaces, gains traction
A revised plan for reforming the city of Atlanta’s troubled pension system emerged from a city council committee on Wednesday, gaining approval of both the panel and Mayor Kasim Reed’s top aide.
It also puts new employees into a defined contribution
Under the new plan, the 1 percent multiplier is less than it had been in past years, but the city will also pay at least two percent of the employee's compensation into the defined contribution plan annually. Future employees will enter into a Social Security retirement program as well, but that is off the table for current workers.
“We do believe this is a reasonable compromise between what some councilmembers and the employee groups want and the goals we set 18 months ago,” said Peter Aman, the city’s chief operating officer.
Jim Daws, who as president of the Atlanta chapter of the International Association of Fire Fighters had threatened to sue the city if pension changes were approved, called the plan a “positive development” but stopped short of full support.
If approved by the full council, Aman said the plan would save $15 million for the rest of this year and over $20 million annually in subsequent years. It would also prevent the city from laying off any employees, as proposed in the current $545 million budget.
Adrean's proposal came a week after Reed unveiled a plan that would freeze the city’s current defined benefit plans. It proposed that employees contribute 6 percent of their salary toward a retirement savings plan. In that plan, the city would have added a 7.5 percent match.
Adrean and Aman said the new plan has legal precedent and is easier to administer.
“The substitute effectively continues the pension plan, albeit at a much reduced multiplier for current employees. Because of that, it addresses many of the issues that employees have been complaining about,” Aman said. “At the same time, it still saves a substantial amount of money.”
Adrean’s plan removes the so-called “hard freeze,” which meant the would have frozen benefits in three pension plans -- for police, firefighters and general staff -- It also eliminates the option of current employees joining Social Security. Some employees were skeptical of Social Security, in part because of doubts that the program will be around when they retire.
Not everybody was so excited about the new plan. Several committee members -- including Felicia Moore and C.T. Martin -- were surprised they were not informed of the bill before it was introduced.
The seven-member committee voted to accept the legislation 5-0, with Moore and Martin abstaining, but agreed to hold it for a work session, instead of moving it to the full council for a vote next week.
About the Author
Ernie Suggs is an enterprise reporter covering race and culture for the AJC since 1997. A 1990 graduate of N.C. Central University and a 2009 Harvard University Nieman Fellow, he is also the former vice president of the National Association of Black Journalists. His obsession with Prince, Spike Lee movies, Hamilton and the New York Yankees is odd.
