City of Columbia Unveils New Pension Plan
COLUMBIA - Mayor Bob McDavid and his Pension Review Task Force unveiled a complete revamp of the city's pension plan for city employees, police officers and firefighters at a news conference Thursday morning.
The overhaul was prompted when the City of Columbia was faced with more than $100 million in unfunded liabilities for pension funds for employees of the city.
"The City of Columbia had made $270 million in promises to employees and was $117 million short of meeting promises. Uncorrected, these employee promises would grow in 30 years to a stunning $1.6 billion dollars...promises impossible to keep," said McDavid.
Mayor Bob McDavid said the plan is part of an effort to increase pension funds for city employees to 80% by 2032.
Last year, firefighters' pension plans were funded at 51%, police officers at 53%, utilities workers at 58% and additional city employees at 71%, according to McDavid.
McDavid said he and his task force were able to reach their conclusion by treating the issue like a "math problem."
"This is again, the solutions put on the table by employees. They put $50 million on the table over the next 20 years. That's incredible. That's taxes that will not have to be charged, massive layoffs that will not have to happen," said City Manager Mike Matthes.
The new plan eliminates the "80 and Out" early retirement rule for city employees hired after September 30, 2012. The rule stated that city employees whose total years of service and age amounted to 80 were able to retire early. So, the new plan will only impact hires made after the September date.
401(A) plans will also be slightly altered for police and firefighters.The city will no longer match 2% of each employees retirement pensions. Those funds will now be used to pay down the $100 million in unfunded liabilities.
The pension plan will take effect on October 1, 2012.
Matthes stated that no new firefighters or policemen will be hired before October 1 because of the new plan. He also said the plan will not increase taxes for any Columbia residents.