Title
Urging the Mayor and the Board of Pensions and Retirement to join Council in a sustained, collaborative effort to comprehensively and fairly evaluate City employees' retirement benefits, with the goal of ensuring that the City has in place actuarially sound pension plans that balance the interest of employees in a secure retirement with the interest of all taxpayers in having an affordable municipal government with adequate funds to provide appropriate services; and authorizing the Committee of the Whole to conduct hearings on the health and well-being of the City's entire Retirement System.
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WHEREAS, The City of Philadelphia provides qualifying City employees with retirement benefits through the City of Philadelphia Municipal Retirement System, which is administered by the City's Board of Pensions and Retirement; and
WHEREAS, The Pension System is grossly underfunded. As recently as 2001, the City's Pension System's Funding Ratio was as high as 77%, but as of July 1, 2009, that ratio had decreased to 45%, according to a March 2010 report of the City's actuary, Cheiron. Moreover, Cheiron reported that from July 1, 2008 through July 1, 2009 alone, the ratio decreased from 55% to 45%, largely reflecting the impact of the economic recession on Pension System investments and a change in the actuarial liability interest rate assumption. According to the City's Five-Year Financial and Strategic Plan for Fiscal Years 2011-2015, the City's pension costs more than doubled over a five-year period, from $197 million in FY04 to $437 million in FY09; and
WHEREAS, As a result of deliberate budgetary decisions by prior Administrations, the City systematically underfunded the Pension System for many years. The clearest indication of this pattern is the fact that for FY2011, Cheiron estimated that, excluding deferrals authorized by Act 44, the City would have been required to pay $585.7 million based on the City's Funding Policy (or $472.7 million, based on th...
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