Source: United States Conference of Mayors, Volume II, June 2013
…This report, the fourth in the Conference’s series on city pension systems,… describes efforts undertaken in 19 cities of all sizes to reform unsustainable pension plans in which they are participants or which they administer for themselves. It builds on the report published by the Conference of Mayors in June 2012 which described responses being made to pension problems in 16 cities. Across the cities in that report, actions taken on pension problems included:
• increasing annual pension contributions for both cities and employees;
• eliminating benefit increases for current employees and offering fewer benefits for new employees;
• offering new employees defined contribution, not defined benefit, programs;
• lowering or deferring cost of living adjustments for both current employees and retirees;
• lowering benefit multipliers and benefit accrual rates;
• increasing retirement age and service requirements;
• increasing years of service used to determine final average salary for benefit determination; and
• modifying medical options and benefits offered.
The cities in this year’s report, as a group, describe approaches to pension problems that apply, in various ways, these same cost-cutting reforms…
In the majority of these cities, some or all public employees are enrolled in state-administered pension plans, and their reports reflect the fact that, while their ability to motivate and shape reform within these plans may be limited, they have been actively engaged in efforts to do just that. The individual city reports which follow were drafted by officials in the cities submitting them to the Conference of Mayors. They were edited for internal report consistency only; content and tone of the individual reports were not altered in this process. Following at the end of this report are brief summaries of the new public pension financial reporting standards developed by the Governmental Accounting Standards Board, and the new Moody’s Investor Service approach to adjusting public pension assets and liabilities for use in the firm’s independent credit analysis….