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Councilman: City Worker Pensions Must Change

Councilman: City Worker Pensions Must Change

(KFYI News) – A Phoenix city councilman says recent changes made to the city's pension program aren't enough to stave off major tax increases, or cuts to city services, to maintain pension payments.

Councilman Sal DiCiccio on Tuesday showed reporters a list he compiled of the 50 recent city retirees who will benefit the most from the city's pension program in their retirement.

As an example, he mentioned a city librarian who retired at age 58 – four years younger than the earliest that anyone can draw a retirement check from Social Security.  According to DiCiccio, that librarian received a one-time payout of $286,000 encompassing unused vacation time, sick time, and deferred compensation, since Phoenix doesn't put a limit on how much unused vacation and sick time can accrue.

On top of that one-time payout upon retirement, the librarian also qualified for a $102,000 pension that will be paid every year for life.  "And when (you're a city employee and) you pass on, your spouse gets 80% of that benefit" for the rest of his/her life, DiCiccio said, adding that while he feels spouses should get some payment after their city employee spouse dies, 80% is too much.

DiCiccio says the recent caps that the city council approved on how much unused vacation and sick time may be used to calculate the pension amount – which will only apply to new hires – isn't nearly enough of a change to make a significant difference in the city's pension payouts.

Instead, DiCiccio favors a voter initiative that will be on the November ballot that would switch city workers from the current pension program to a voluntary-contribution 401(k) type of program, essentially requiring them to fund their own retirement, with some matching funds from the city.

At a separate news conference, former city leaders, including former councilman Tom Simplot and former city budget director Cathy Gleason, opposed the initiative.

Gleason said an analysis indicates the 401(k)-type system would actually cost the city more, in both implementation and city matching contributions, than the current pension program.

Simplot said he's troubled by who's behind the initiative.  He told reporters that the group pushing the initiative has refused to disclose the contributors to the campaign.  "Is it coming from in state?  Out of state?  We don't know.  We have no idea who is funding the initiative at this point," he said.

 

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