The ordinance to reform the boards governing pensions for City of Atlanta employees was approved today by the Atlanta City Council during a special called meeting. The ordinance consolidates three boards, the General Employees, Police and Fire, into one board to manage all three pension funds. By consolidating the board, employees in all three categories will see improved governance, cost efficiencies and stronger fund performance. The consolidation was recommended by the Blue Ribbon Commission on Waste & Efficiency in Government in 2014 as a second component to the pension reform Mayor Reed secured with the unanimous support of the Atlanta City Council in his first term, and is the final step in what Governing Magazine has called the most sweeping overhaul of public employee retirement benefits by a large U.S. city in recent years.
The Commission was charged with identifying cost-savings strategies in City government to enable the City of Atlanta to invest appropriately in City infrastructure without raising property taxes and to create a more competitive, fiscally-sustainable operating model. Business leaders including Richard Anderson, former CEO of Delta Airlines and Martin Flanagan, President and CEO of Invesco were members of this commission, as well as members of the Atlanta City Council and labor leaders from the International Brotherhood of Police Officers, the Atlanta Professional Firefighters Union, AFSCME, Professional of Association of City Employees and Progressive Firefighters of Atlanta Union.
“I applaud the Atlanta City Council for adopting this ordinance today, allowing us to finish reforming the City’s pension system – a process we started in my first year in office,” said Mayor Reed. “Reforming our pension system has enabled the financial success and stability we have enjoyed for the past several years. It was equally important that we support our employees with a stronger, more effective governance system. By improving performance by just one quarter of one percent, pensions will be solvent over the next 25 years. What we have done in the past has gotten us to a AA+ credit rating from all three major ratings agencies. I am confident that with this most recent step, we are well on our way to achieving a AAA rating.”
Reforming the City’s three pension boards into one strong, streamlined and effective board will benefit city workers, taxpayers and the public
Ordinance 17-O-1589 will result in an improved governance structure in line with best practices for pension boards nationwide, bringing financial expertise to the pension investment decisions, reducing administrative costs of servicing three separate boards and ensuring investment performance is optimized, so that the annual pension contribution cost from the General Fund is the lowest it can be in all financial cycles. Improved pension fund performance will result in a reduced need for the City to fund pension benefits, freeing those funds for use for City services. Improved governance will increase transparency for employees in the pension plan as well as the public.
“Reforming the City’s three pension boards into one strong, streamlined and effective board will benefit city workers, taxpayers and the public,” said Commissioner Yvonne Yancy, Department of Human Resources. “As a trustee for the employee pension plans, I am proud to have been a part of this reform process, and I am thankful to the Atlanta City Council and all stakeholders for their collaboration to improve our pension boards and performance.”
The three pension plans will remain separate, and the consolidated board will not affect each plan’s determination process for pension awards. The new ordinance does not raise employees’ pension contributions or decrease their benefits at retirement.
“I am proud to have supported this measure today, because with this reform legislation we have finalized the comprehensive reform plan we started in 2011,” said Councilmember Kwanza Hall. “Atlanta sets the example and represents excellence in all that we do; our pensions should be governed with excellence and with the highest levels of fiduciary responsibility. This ordinance will improve outcomes for city workers and taxpayers, and will support Atlanta’s reputation as a leader in pension reform.”
When Mayor Reed took office in January 2010, the City was faced with a $1.5 billion unfunded pension liability. The decisions made by the Reed Administration to tackle pension reform have resulted in the City’s pension costs being reduced by more than $270 million over ten years. Through Mayor Reed’s leadership, the City has passed eight consecutive balanced budgets; has earned nine consecutive credit ratings increases to achieve AA+ from Moody’s, Standard & Poor’s and Fitch; has achieved a record $200 million in reserves; and has never raised property taxes.
At the same time, Mayor Reed has raised the minimum wage to $14 per hour in FY18 and $15 per hour in FY 19. Since 2010, public safety personnel and city employees have received eleven salary increases totaling more than $26 million in compensation. In January 2011, sworn officers in the Atlanta Police and the Atlanta Fire Rescue Department received a full step pay increase of 3.5 percent, the first full step increase granted since 2007. In 2013, sworn personnel received two additional pay increases, for a total of 5.5 percent in increases.
The Reed Administration has consistently made significant investments in employee compensation and benefits. Amid the worst economic recession in 80 years, the Administration eliminated furloughs and layoffs citywide, built the largest fire department to date and eliminated staffing shortages on fire trucks, brought the city’s police force to 2,000 officers for the first time in the department’s history, and restored command staff at the city jail. Earlier this year, Mayor Reed made the City of Atlanta the first local government in the state to offer up to six weeks’ paid parental leave for primary caregivers and up to two weeks for secondary caregivers.
Atlanta City Council Approves Pension Board Reform Ordinance was originally published on atlantadailyworld.com