Pension Plan Concerns Addressed to City Council
By: Michael Rutschky
Citizens voiced their concern over the costliness of Pensacola’s pension plan during the open forum segment of the Sept. 25 city council meeting. Pensacola resident Bill Cummins began the discussion when he presented the council with his assessment of the pension’s cost to city taxpayers. According to Cummins the sum of money that the city is obligated to pay for this pension has risen to $103 million, a huge jump compared to the $2.9 million that was owed just 12 years ago.
“You will have more money going to that plan than you will have received in taxes,†said Cummins.
The discussion was started as a response to one of the councilmen publicly denying that they had a pension plan under the city at the Sept. 22 meeting of the republican women’s club. Cummins was the first of three Pensacola residents who had attended the Sept. 22 meeting and had come before the council to express their views on the subject.
Members of the city council agreed with Cummins on the urgency of the matter. Councilman Sam Hall explained that the pension’s unfunded liability is approximately $20 million more than what the city takes in from its general fund and places like the Energy Services of Pensacola.
“It’s one of those things that the council is going to have to get its arms around, and pretty quickly,†said Hall, “I’m not sure exactly when it’s going to get to crisis level, but I think it’s going to reach up and bite either this council, the next council, or certainly the one after that.â€
The city switched its pension plan for newly hired employees from the city plan to the Florida retirement system in June of 2007. When this happened all employees hired prior to 2007 were given the option of switching to the Florida retirement system or to stay with the city pension plan. As Councilman Marty Donovan explained, the reason the city owes so much is because over 95% of employees didn’t switch to the Florida system.