MEMPHIS, Tenn. — City employees prepare to square off with their bosses at City Hall to fight for pension benefits.
Last December, the City Council voted to strip some newer employees of their pensions and put them in a new plan.
On Thursday, the unions representing those employees took a major step to stop the cuts.
The unions filed a lawsuit asking a judge to stop planned pension cuts for newer employees. They said the law is on their side to stop new pension cuts slated to take place next July.
“The City Council just arbitrarily selected 7 1/2 years and there was basis for that decision other than just pick a number,”said Danny Todd with the International Firefighters Association.
Other cities around the country changed pension plans but this group said this change is unprecedented and explained why it’s not legal.
“It’s our position that when you have accrued rights which all present employees have, then you cannot take them away. You cannot change the rules in the middle of the game,” said Union Attorney Deborah Godwin.
The 7 1/2 year cut off was a compromise between the City Council and city administrators. The city said state law forced it to restructure the pension and shore up the plan. The Unions dispute that and said it’s scaring off good employees.
“This pension fund is in good shape. It’s not broken. It was done for political compromise reasons,” Godwin said.
Memphis Firefighter Association President, Thomas Malone, added, “We’ve had almost 500 fire and police officers who have left this city for other places where they can get their benefits.”
City administrators adopted a hybrid retirement investment plan for newer employees. It’s one that looks similar to a 401K in the private sector where workers put in the bulk of the money.
However, unions, especially fire and police, said what works for companies doesn’t work for their members and taxpayers should fund the pension.
“They come on this job for pretty much lifetime when you talk about 25, 30, 35 years and you want those type of people because they have a love for the job,” said Mike Williams, Memphis Police Association President.
Mayor Wharton’s Office said it has not received the lawsuit but it is prepared to protect the interest of the City of Memphis.
Mayor -elect Jim Strickland was out of town but he did vote to cut those employees from the pension plan while serving on the City Council.