Paying For Memphis Pension Reform

January 16, 2014

 

I have been comparing the past financial policies and results of the City of Memphis with Shelby County. Past Shelby County financial management has been much better than Memphis and the results are obvious when you compare the past and present Comprehensive Annual Financial Reports (CAFR) and the pension and other post employment benefits reports (OPEB).

Here is another example of where the County acted and the City did nothing. Both the City and the County have personnel policies concerning vacation, sick days and personal day policies that are well beyond what the private sector offers. Concerning vacations they both grant 5 weeks’ vacation after 25 years. The private sector is generally 3 to 4 weeks after 25 years.

Now the biggest difference is in sick days. Both the City and the County used to grant up to 2-1/2 days per month (30 days per year) after 15 years of service. Then on February 22, 1993 the County changed for all people hired after that date to a maximum of 18 days per year after 10 years of service (1-1/2 days per month). The City of Memphis did not change anything. That is one major reason the City has $90 million in owed but unpaid benefits versus $26 million for the County. The City refuses to make the hard choices and the taxpayers suffer.

The needed changes in vacation and sick day policy are a well of money that can be utilized to pay for the needed increase in pension contributions. I have other suggestions for coming up with the needed money and I will publish them in the future.

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