It’s time for truth to triumph over political grandstanding. The city of Atlanta’s worker pension system is unaffordable. Period. Costs must be cut by millions annually.
There’s no way to do that without lowering expected payouts to current and future workers. Making up the difference will require employees to save more and hope, like millions of other Americans, that financial markets will recover soon and again act to compound their personal retirement savings.
That’s the unpopular, unavoidable bottom line. Putting off tough, yet necessary, decisions does nothing but leave workers with increasingly empty promises that might not be kept in the end. The hard task of reconciling the city’s thin resources against steadily increasing retirement obligations will not go away, not given this flat economy, which has pummeled tax revenues. That’s unlikely to change soon.
It’s time for the City Council to resolve this problem. They can only do that by deciding quickly on a new way of worker retirement. For the sake of taxpayers and employees who are fretting more with each day of inaction, the council should make a hard decision by June 30, when the city’s budget for the coming fiscal year must be decided. It’s unacceptable for the council to drag out the decision perhaps even into September, as City Council President Ceasar Mitchell has proposed.
Council members seeking more time argue that such an important decision should not be rushed. Their definition of doing things in a hurry would be considered glacial by the thousands of businesses and even governments that have agonized over the same decisions, yet acted quickly on changes that have profound impacts on dedicated employees.
The city has spent enough time seeking to forestall the inevitable. Mayor Kasim Reed rolled out his initial plan in March and the crisis was an old one then. Decisions should be made — and soon.
It may help a little to realize that Atlanta and its civil servants are far from alone in grappling with the prospect of a more-costly, less-certain retirement. That’s a byproduct of the great resetting of the American economy that will impact our lives for years to come.
That has sped the closing of the curtain on defined-benefit pensions that pay a predictable, regular amount to retirees. Such plans reduced the imperative for workers to live below their means and save heavily for retirement.
Like it or not, the new normal is defined-contribution, 401(k)-like plans that generally guarantee nothing but a set employer contribution. They put more of the risk onto workers of financing a comfortable retirement, especially given jittery markets that have decimated investment returns lately.
Murky prospects for markets don’t obscure the essential reality here — that workers will need to sacrifice today by saving more if they hope to retire decently at a reasonable age.
City employees deserve to hear this tough, rugged reality soon so they can begin adapting to the changes.
As of late last week, there were three pension reform plans before the City Council, two from members and another from Mayor Reed, who has taken the lead in pushing for action now. His commitment to forthrightly facing the fiscal pain is laudable for a politician likely to face voters again.
Only those possessed of a mean spirit or demagogic nature would relish making decisions that will result in lower benefits for municipal workers, many of whom risk their health and lives in service to Atlantans.
Fairness to them means switching to a retirement system that safeguards benefits already vested while also reducing costs by millions of dollars each year going forward. The end result should be an affordable, sustainable plan that helps workers make the best choices possible to safeguard their financial well-being.
That can’t happen if the city continues to favor debate and indecision over decision-making.
Andre Jackson, for the Editorial Board
Atlanta Forward: We look at major issues Atlanta must address in order to move forward as the economy recovers.
Look for the designation “Atlanta Forward,” which will identify these discussions.
