The U.S. Conference of Mayors recently released a report describing actions taken by several U.S. cities “to reform unsustainable pension plans in which they are participants or which they administer for themselves.”
The report, entitled City Approaches to Public Pensions – Volume II, describes pension reform efforts underway in 19 cities of all sizes across the U.S. from Allentown, Pennsylvania to Arlington, Texas.
- Jacksonville, Florida, for example, is seeking approval of a police and fire benefit package that would save the City $45 million in the first year by increasing employee contributions, capping annual benefits, increasing retirement age, reducing benefit accrual rate, and lowering cost-of-living adjustments.
- Murfreesboro, Tennessee is planning to save $3 million over the next 10 years by retaining a defined benefit plan for current employees, and adding a defined contribution plan for new hires.
- Chula Vista, California is working on a plan based on an agreement by City administrators, the Police Chief, and Fire Chief that all city employees pay the full share of their pension contributions, for an initial cost-savings of $6 million.
The report says that while each of the 19 cities’ reform initiative is unique in its approach, they share common elements such as retaining modified, less costly defined benefit plans, and achieving better balance of city and employee contributions to plans.
Volume I was published in June 2012, and included descriptions of 16 cities’ pension reform plans. Four of the cities in the 2012 report updated descriptions of their pension reform plans, and are included in the 2013 report as well.
The U.S. Conference of Mayors report also includes summaries of the new Governmental Accounting Standards Board public pension financial standards, and Moody’s approach to adjusting public pension assets and liabilities in credit analysis.