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Editorial by Mayor Madeline Rogero
Knoxville News-Sentinel
October 7, 2012

Voters urged to approve reforming Knoxville's pension plan

Early voting is almost upon us and Election Day is just weeks away. While most folks are talking about the presidential election, Knoxville voters have another choice that will make a huge difference in the future of our city.

I urge city voters to scroll all the way to the end of the ballot and to vote for major changes to the city pension system. Please join me, Knoxville City Council and our city employee groups in supporting this reform, which will save city taxpayers millions of dollars.

Charter Amendment for 2012The city pension question is titled "City Charter Amendment," and it comes right after seven county charter items. It is the last item on the ballot. Please make sure you don't leave the voting booth until you have voted to end the present pension system for future employees and replace it with a system we can afford.

Our present pension plan is not sustainable. It provides a level of benefits that we cannot afford and commits the taxpayer to paying for all of these benefits if the stock market does not perform according to expectations. While we should and will make good on our commitments to present employees and retirees, we should and must make changes for those hired after Jan. 1, 2013.

When you vote for the amendment, you will be voting to raise the retirement age for new employees. You will be voting to cut the annual cost-of-living raises from a minimum of 3 percent to a maximum of 3 percent and a minimum of zero. You will be voting to reduce the formula that determines the annual retirement benefits.

The new proposed plan is fair to our hard-working employees by providing a base level of retirement security. But it also dramatically reduces the long-term obligation for city taxpayers and shares the market risk for meeting retirement benefits between taxpayers and employees.

A vote for the amendment caps the city's obligation to an employee who works for 30 years to $24,000, beginning at age 63, for new general government employees. Additional yearly benefits for any retiree will depend on stock market performance.

On the other hand, a vote against the proposed charter pension change will maintain the current system, with its lower retirement ages and higher benefit levels that the city is fully responsible for meeting regardless of stock market performance. If you vote against the amendment, you will be voting to continue very high annual cost-of-living increases. If you vote against the amendment, you will be voting to continue a plan that we just can't afford and that we cannot sustain. If you vote against the amendment, we will be unable to fix this problem for at least another two years.

The changes before you on the ballot are necessary for the long-term health of our city. I am proud of our hard-working employees who realized that changes needed to be made to ensure that the system could be kept sound. I am proud of City Council for working to reduce the burden on taxpayers while recognizing that we count on our employees to do often dangerous work.

In the near term, the city is expected to face yearly significant obligations to pay for benefits promised to retirees and current city employees under the existing plans. This year City Council joined me in committing $10 million dollars as a down payment on this commitment. We are dealing with the commitments we have, but we must change the system if we are to make good on our commitments in the future.

When you join me in voting for the amendment, you will ensure that our city continues to fairly compensate our dedicated, well-trained employees, while also protecting taxpayers against unaffordable future obligations.

Click here to view the full sample ballot for November 6, 2012.