Stacy Head: Why we need municipal employee pension reform now
By Stacy Head
Source: The Advocate
April 20, 2017
We’re running out of time. That’s how I feel with a little less than a year left in office as a council member. Election season is heating up and you will begin to hear much from candidates about their priorities for the future of our city. But there is still work to be done in this term; promises to keep. In our remaining time, I need the residents of New Orleans to remain vigilant and speak up at Council meetings.
I hope you will speak up on an issue I’ve been working on for several years and would like to finish before I leave office: municipal employee pension reform. This is supported by business and good government groups, and I’m asking for your support as well. The reforms I am proposing are based on years of research and comparisons with other governments and recommendations by the Bureau of Governmental Research. Pension reform was also included in the Forward New Orleans platform, which council members pledged to support when they were candidates four years ago.
Changes to public pensions make people nervous, and often rightly so. We’ve all read stories of city or state pension systems that were unable to fulfill their obligations so either retirees and employees got the shaft or the taxpayers got a bill, sometimes both. I would like to avoid that fate for NOMERS with a few modest changes.
If passed, these changes will save the City over $2 million immediately, with the savings increasing every year. Importantly, no retirees or current employees with more than 10 years of service to the City would be impacted by my proposal. The proposals apply only to new hires and employees less than 10 years of service. I believe that without some adjustments now, all employees could face drastic benefit reductions in the future.
The New Orleans Municipal Employees Retirement System is the largest of the city’s three locally-controlled pension funds covering nearly all municipal employees except police and fire. The latest annual report showed it is funded at only 72 percent, which is unhealthy by any measure. When a pension system is under-funded, the City must invest more of your tax dollars to prop it up. This increasing investment in the pension system and increased burden on the City’s shrinking tax base threaten the long-term viability of the system, the fiscal health of the City, and a reasonable pension benefit for City employees.
This is a complicated issue that isn’t sexy, but if you care about your tax dollars being used wisely, you’ll support this effort. I hope you will also voice your support to my colleagues. I will present my proposal to the Governmental Affairs Committee, which meets Thursday, April 27th at 1:00 p.m.
I need the public to pay attention and support these reforms. This is a hard process, and it has political risks. But as elected officials and the budget monitors for the city, my colleagues and I need to be strong. We’ve had years to make this important move. Now’s the time.
council member at large
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