Tuesday, March 11, 2008 | Mayor Jerry Sanders is parading around town his new city employee pension plan. I am a member of the negotiation team and have heard the pitch directly from the plan inventor’s mouth, so nothing has been lost in translation. Let me tell you why this new city employee pension plan is doomed to fail.
First, the plan proposes that an employee who works for the city for 30 years and retires at 65 will receive 80 percent of the employee’s salary as a pension. That number is only achieved if the city gives the employee a 4.25 percent salary increase every year for thirty years! That means Jerry must increase every employee’s salary 127.5 percent over the career of the employee. What citizen is going to applaud that plan? However, that is what it takes for Jerry’s plan to work. I bet he did not tell you that, did he?
Mayor Jerry proposes no salary increase in the first year of the plan, yet the plan requires a 4.25 percent increase to work. On the first day the plan is in effect, the mayor’s plan is flawed. How do you tell the public this is the answer to the pension problem with a new pension problem?
Let me tell you some more reasons why this plan is flawed. The company who came up with this scheme is called Mercer. Ever heard of them? You should, they are a partner with Kroll and we all know how well they deliver audits to the city and at what cost.
Still not convinced that the new pension plan has a problem?
Do you know what Mercer does besides invent pension plans? This is right from their letterhead: they teach companies how to outsource jobs.
The new pension plan is nothing more than a scheme to eliminate the city’s ability to recruit and hence reduce the city work force. Once Jerry has reduced the work force he can hire Mercer to invent the plan to outsource the remaining jobs.
There’s one flaw with that plan, Jerry. In your desire to be transparent regarding your city activities, we can see right through this scheme.