Lexington Mayor Strikes Deal to Weather Pension Shortfall

Lexington Mayor Strikes Deal to Weather Pension Shortfall

Postby Nick Della Volpe » Wed Jan 23, 2013 3:02 pm

Lexington Mayor Strikes Deal to Weather Pension Shortfall

According to news reports, Mayor Jim Gray of Lexington, Kentucky has negotiated a proposed deal with the police and fire employees to help whittle away at the $290+ million pension shortfall faced by that town. While all pension plans are different, Lexington's bold, employer--employee, cooperative actions are worth examination and possibly adaptation or emulation here.

Gray met with police and fire reps and agreed to increase city funding (to $20 million, up from $11 million/ year) towards reducing the pension shortfall in exchange for worker agreements to reduce pension COLA (sliding scale from 2% down to 0% until 2016, thereafter to 1%, based on pension benefit); increase in the retirement age; a lower base salary multiplier; reduced disability payments (from 60% down to 50%); increased worker contributions to 12% of pay.

These efforts are expected to cut the pension shortfall nearly in half, to $160 million.

Details can be found in a web article: http://www.kentucky.com/2013/01/18/2481 ... agree.html
Nick Della Volpe
 
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