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Contact:
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Dexter Chambers, City Council Communications Director: 404-330-6309/392-0159
Thermice J. Bevelle, City Council Communications Specialist: 404-330-6823
Bruce Morton, City Council Communications Specialist: 404-330-6357
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| Date: |
August 20, 2008 |
City Council Establishes Task Force to Review Conditions of
Atlanta’s Pension Plans
Recommendations to stabilize funds due in December
ATLANTA – The Atlanta City Council will establish a select committee to review the condition of Atlanta’s pension plans and recommend financial remedies to stabilize the funds for the future.
The City Council unanimously approved forming the task force Monday night. The measure is being sponsored by City Councilmembers Clair Muller, District 8, and Howard Shook, District 7.
“Obtaining a quick but thorough grasp of the conditions contributing to Atlanta’s pension costs, and then fashioning recommendations designed to make those programs fair and affordable is, in my view, of critical importance,” said Shook, Chair of the City’s Finance/Executive Committee.
The task force would be charged with reviewing the condition of the Atlanta pension plans; determining the financial impact changes have had to those plans as well as to the General Fund; revisit the findings of the Pension Technical Advisory Committee (PTAC) and consider such actions that will ensure appropriate and sustainable policies and funding for plans.
The city of Atlanta, like many governments, is currently faced with increasing pension costs threatening the stability of the funds as well as the general fund. All three of the funds have significant accrued unfunded liability.
“A small committee to review the recommendations was suggested by the Pension Technical Advisory Committee of 2004,” said Muller, a member of the Finance/Executive Committee. “The pension liability will hit next year's budget, as well, and the Council should quickly look at the recommendations from 2004 as well as research the actions of other cities.”
The City’s three pension funds include Police, Fire and General Employees.
All city employees pay a portion of their salary to one of three city pension funds with the most of the money paid coming from the city. The money is then invested to grow the fund and cover retiree benefits of former city employees.
The differences between the pension plans’ assets and benefits payable to retirees, is considered unfunded liability that the city is obligated to pay.
Two years ago, the Government Accounting Standards Board set a rule requiring government bodies to tally the cost of retirement benefits promised to current employees and report the numbers to taxpayers and bondholders. The rule is expected to be phased in by the end of 2009
In 2004, the city of Atlanta convened the Pension Technical Advisory Committee which issued a report with nine (9) recommendations. In 2005, the City Council and the Franklin administration responded to the recommendations by adopting certain modifications to the pension funds. The PTAC’s recommendations were only partially adopted. Since then conditions have changed.
The Chairs of the Finance/Executive Committee and Committee on Council would determine the membership of the select committee.
The select committee would submit its report to the Full Council at the last regularly scheduled meeting in 2008.
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