CINCINNATI - Cincinnati City Council had to do it, but members didn’t like it much.
“It” was voting Tuesday afternoon to place a charter amendment on the November ballot that could dramatically change how the city’s pension system operates.
Because a group of citizens collected enough signatures during the summer to mount the charter amendment, City Council was legally obligated to place it before voters.
But none of City Council’s nine members support the amendment’s aim, and neither does Mayor Mark Mallory. It’s one of the rare occasions where the diverse group is united on an issue.
Echoing the sentiment of his colleagues, Councilman P.G. Sittenfeld said, “Although I am voting yes today, I will vote no at the ballot box."
If passed by voters, the amendment would change the city's public pension plan for new hires from a defined benefit plan to a defined contribution plan.
Also, it would impose contribution caps for the city and make cost of living adjustments compatible with actual increases in the Consumer Price Index, with a cap at 3 percent annually.
Currently workers and retirees at City Hall are covered under the Cincinnati Retirement System, which is a defined benefit plan administered by the city.
Cincinnati’s pension plan has an unfunded liability of $870 million. That’s mostly due to the economic crash of 2008 that affected the system’s investments, along with rising healthcare costs.
A group known as Cincinnati for Pension Reform is pushing the amendment. Its leaders all have ties to the Cincinnati Tea Party, but have kept a low profile in speaking publicly about the ballot issue.
Amendment opponents said the measure would worsen Cincinnati’s pension troubles.
City workers aren’t covered by Social Security, said Paula Tilsley, director of Cincinnati’s pension system. If the benefit for workers isn’t large enough under the proposed system, the city might lose its Social Security exemption and be forced to start paying into it.
Also, future city workers might lose IRS benefits that allow them to defer taxes on retirement savings.
Cincinnati’s $2.1 billion retirement system covers 4,400 retirees or surviving spouses; there are about 2,900 active employees who pay into the system.
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