News Column

Knoxville mayor, employees debate pension issues

July 17, 2014

By Tony Hernandez, The Knoxville News-Sentinel, Tenn.

July 18--Knoxville employees, retirees, union leaders and pension board members voiced opposition to two proposals Mayor Madeline Rogero will bring to the City Council next month.

Those proposals, if approved, could reach voters in November.

City Council members met Thursday for a workshop to discuss five proposals, three of which were supported by the Knoxville Pension Board.

Employees, who put 6 percent of their paychecks into the pension system, and retirees said they object to Rogero's proposals to initially restrict lifetime payments to retirees and non-spouse beneficiaries -- with the possibility to add exceptions at a later date -- and also to add two new pension board members.

Those new members, Rogero said, would be required to live in the city and have experience with finance and/or retirement planning. Those members cannot work for the city or be members of the pension system.

"I'm quite concerned that we need to have citizens on the board," said retiree Anita Cash, former president of the City Employees Association. "I understand the need for it, but don't say it's to have financial expertise when in 2013 ... the (pension) fund paid out $1,097,461 for money managers. That's what it said in the minutes."

The city's charter requires the board to be filled with two representatives from the general government and two from uniformed employees, each elected by their peers. The charter also appoints the mayor, the city's finance director and one council member to the board.

Kristi Paczkowksi, pension system director, suggested new members should also include a Knoxville retiree.

The police and fire unions initially opposed the idea in private meetings with Rogero and later compromised with the mayor to have the pension board vet and approve resident members before the City Council ratifies the selection.

"I think it would be a preference of the employees that there weren't folks added to the board," said Mark Taylor, president of the local Fraternal Order of Police. "If it's your decision in the end to add folks to the board, then I think it's vitally important that the employee reps that have been voted on to serve on the pension board have that say or have some say in that process."

Rogero said a committee could find new members.

"We might set up a few members who want to collect resumes or recommendations from other employees, from the public, from council members," Rogero said. "I would likely bring a few names forward. Councilman (Finbarr) Saunders might as well as the members of the board. The way I foresee it, we will gather some suggested recommendations then review them by the pension board then find somebody."

City Councilman Duane Grieve suggested the mayor should consider also restricting the spouses of employees from participating in the committee.

Pension board members continue opposing the beneficiary proposal maintaining it does not impact the pension system financially.

Rogero continues to argue longer than average pension payments, especially when children are chosen as lifetime beneficiaries, place unnecessary risk to the investment obligations of the pension system.


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Source: Knoxville News-Sentinel (TN)

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