MEMPHIS, Tenn. — After months of anticipation and delay, Mayor A C Wharton is expected to unveil a new pension plan for city workers during an executive session with the city council Tuesday.
WREG has learned the proposal won’t be the contentious 401k plan initially proposed, but a hybrid.
“I can say that the mayor has bent over backwards to compromise. I think the taxpayers are going to feel like me a little bit. I’m frustrated that there are so many changes all the time,” Councilman Lee Harris said.
Harris said this is another change after the council recently addressed the issues with the city’s pension in June earlier this year.
Harris and councilwoman Wanda Halbert told WREG they are meeting with city administrators to learn more about the mayor’s two-part hybrid plan before Tuesday.
The new hybrid plan will be part city-employee contribution, part 401(a), and part guaranteed lifetime annuity.
It would only apply to new employees and those with less than ten years of service, which is about 2,400 out of roughly 6,000 city employees.
The market-based plan involves professionals who decide how to invest employees’ two-percent contribution.
The city pays between three and 16 percent of an employee’s salary, depending on his or her job title and length of time working for the city.
A city human resources professional said certain types of firefighters and police officers are eligible for the 16 percent city pay-in.
In the 401(a) plan, the city contributes 1.5 percent of employees’ salaries and the employees contribute six percent.
City council members already have several concerns they want to address.
Halbert has heard some employees complain that certain types of workers receive a higher percentage of money from the city.
She added she’s also concerned about taking away from current employees, rather than only instituting the changes for future hires.
Harris said he understands most employees will receive city contributions of approximately 4.5 percent, but wonders if that amount is too low.
He also wants to learn more about how the city plans to afford the lifetime annuities.
Harris added he understands that taxpayers and employees are confused by the repeated changes, but said it’s possible the changes could continue for a bit longer.
Mayor Wharton was traveling Monday and did not comment on the proposal.
Click here to read the mayor’s letter to city employees.
