Mayor Rogero Gives Statement on City's Pension Plan

Communications Director

Eric Vreeland
evreeland@knoxvilletn.gov
(865) 215-3480

400 Main St., Room 654A
Knoxville, TN 37902

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Mayor Rogero Gives Statement on City's Pension Plan

Posted: 03/06/2012
Mayor Madeline Rogero made the following statement to City Council on Tuesday, March 6 in light of the Council's Pension Task Force report:

The Council's Pension Task Force has reported that the City's current pension system is not sustainable. They recommended that we consider alternatives to the plans ranging from defined benefit to defined contribution.

We have two significant issues before us.

1) Determine how to meet our current pension obligations in future years within the framework of the existing pension plans for current vested employees and retirees (in light of the Blackwell court decision). This obligation presents major funding challenges that we will face in future years.

2) Structure a new sustainable pension system for new employees that provides competitive benefits and reduces future taxpayer burdens.

We are under real time constraints on the second issue because any changes to the pension must be on the ballot by November of this year. Right now it is imperative that we focus on the issue of finding the best plan for the future.

After discussion with Vice Mayor Pavlis, I have asked my Deputies Bill Lyons and Eddie Mannis to work with Councilman Finbarr Saunders and our actuary, Alan Pennington, to flesh out alternative pension plan scenarios including defined benefit, defined contribution, and one or more hybrid approaches.

We are committed to getting these alternatives before our employees and retirees, City Council, and the public in a timely manner such that the plans can be discussed, altered, and tweaked. We will ensure that Council members have all the information you need to consider all alternatives and ultimately place a new plan on the November ballot.

I anticipate a full, robust discussion that considers all aspects of the pension, including the apportionment of risk between the employees and the public, the effect on our competitiveness in hiring and retention, and the impact on the city's future financial stability and demands placed upon our taxpayers.

I look forward to working with you on this critically important issue.