Councilman: Memphis 'must stop the bleeding,' statewide pension - Action News 5 - Memphis, Tennessee

Councilman: Memphis 'must stop the bleeding,' statewide pension worth consideration

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State Treasurer David Lillard wants new Memphis city hires to consider the statewide pension program. State Treasurer David Lillard wants new Memphis city hires to consider the statewide pension program.
Council Chairman Jim Strickland says the city must stop the bleeding somehow. He says statewide pension is worth consideration, but he needs more details before he is sold on it. Council Chairman Jim Strickland says the city must stop the bleeding somehow. He says statewide pension is worth consideration, but he needs more details before he is sold on it.

(WMC-TV) - The state treasurer offers a safety net as the City of Memphis' pension fund hits hundreds of dollars in the red; the worse it gets the more it will cost taxpayers.

State Treasurer David Lillard wants new Memphis city hires to consider the statewide pension program. If Memphis employees join the statewide pension plan then taxpayers could see as much as 21 percent in savings.

"As a Memphian, I have Memphis' interest at heart," he said.

The idea is getting mixed reaction.

Memphis police union President Mike Williams says Memphis taxpayers would lose their stake in the pension fund.

"You now control $2.2 billion, and you're going to give that up to the state?" he said.

Council Chairman Jim Strickland says the city must stop the bleeding somehow. He says statewide pension is worth consideration, but he needs more details before he is sold on it.

"This is the most serious financial situation we've been in since I've been on the council," said Strickland.

The city says they cannot afford the pension as it is.

"Frankly, we've not picked up the tab and sort of done a buy now, pay later on pensions and later has arrived," said Memphis City CAO George Little.

Much like debt not paid off, interest accrues the longer it takes to replenish the pension fund. It has now unfunded between $301 million to $682 million, depending on who you ask.

"The amount adding up is $400 million more of debt. That's why I want pay it off in two years and not take the full six years," said Strickland.

Four options are on the table: Keep pension as it is, switch to a 401k plan, a hybrid of the current plan and 401(k), or the statewide plan.

Treasurer Lillard plans to meet with the Memphis City Council next Tuesday to explain the state pension options. Read more about the statewide retirement options below.

TN Consolidated Retirement System: http://www.treasury.state.tn.us/tcrs/index.html

Deferred Compensation: http://www.treasury.state.tn.us/dc/index.html

Optional Retirement Plan: http://www.treasury.state.tn.us/orp/index.html

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