City retirement

Jay Hanselman

Cincinnati Council is ready to endorse a process that would let a federal court mediate a solution to the city's underfunded pension problem.  The Budget and Finance Committee voted unanimously Monday for an ordinance to make that happen.  

The ordinance would let the city manager negotiate a settlement agreement with various parties on a long-term solution to the pension issue.  Right now the retirement system is only 61 percent funded and that will only get worse without some action soon.  

Cincinnati Council's Budget and Finance Committee holds a public hearing Monday on a plan to let a federal judge mediate a solution to the city's pension crisis.  

A Cincinnati Council member said he had a plan to put the city's retirement system on a path of solvency.  Christopher Smitherman introduced his motion Tuesday during a council committee meeting.

One of his proposals is to end the three percent compound cost-of-living adjustments given to most retirees each year.  Smitherman would change that to a simple COLA tied to the consumer price index and not exceeding two percent per year.  Those adjustments would also be suspended for three years if his plan is approved.

Cincinnati Council could be voting in the next several months on proposals to stabilize the city's underfunded pension system.  Some members said the action needs to happen soon, while others said the problem will not be remedied overnight. 

The Budget and Finance Committee heard about the issue Tuesday. 

Jay Hanselman

Cincinnati voters will decide in November if they want to amend the charter to make changes to the city's troubled pension system.  Those could include finding a way to fully fund the current plan in ten years and requiring new employees to be in 401K style plans similar to those offered by many private employers.  

A Cincinnati Council Committee will likely vote Tuesday to place a charter amendment on the November ballot that would change the city's retirement.  

The committee doesn't have a choice since the group behind the effort collected enough valid signatures to get the issue before voters.  

Jay Hanselman

Cincinnati officials are again looking for solutions after another bad report on the city's retirement system.  It added another $133 million to its unfunded liability last year.  

Council's Budget and Finance Committee heard the presentation Monday.

One Council Member asked if the city can invest its way out of trouble.

Eric Gary, an actuary with Cavanaugh MacDonald, said maybe.

Jay Hanselman

Update 6/5/2013 at 10:20 am:  Documents received from the city show the pension system's unfunded actuarial accrued liability as of 12/31/2012 was $862,122,656.  That compares with the unfunded actuarial accrued liability as of 12/31/2011 of $728,428,380.  That means the unfunded balance increased by more than $133 million during that time.

One section of the report states:

Provided

Cincinnati Council held another special meeting Wednesday night to discuss the city's troubled pension system. 

Like many plans around the country it has a large unfunded liability, meaning without changes eventually there won't be enough money to pay promised retiree benefits. 

Council Members Charlie Winburn and Christopher Smitherman called the meeting. 

Jay Hanselman

Preliminary numbers show Cincinnati's Retirement System had an 11.9 percent return on its investments for 2012.  That's better than the 7.5 percent officials had projected. 

That's about the only new information that came from a special city council meeting Wednesday night to discuss the retirement system. 

Council Members Christopher Smitherman and Charlie Winburn called the session. 

Smitherman was upset by who was not at the meeting...