Pension reform demands action in KC
The Kansas City Star
At yet another private meeting today, Kansas City police, fire and union leaders will argue with City Manager Troy Schulte and other city staff members over pension reform.
Supposedly, these closed-door sessions over the last several months have led to some reasonable ways to change retirement plans that Schulte has called “unsustainable.”
Properly so, City Council member Jan Marcason is keeping pressure on all sides to come forward with a plan at a council committee meeting Wednesday morning.
The situation is dire but not out of hand — yet. The city’s unfunded pension liabilities jumped from $559 million to $611 million between 2011 and 2012.
A task force last year recommended a solid, basic framework for reform. These points ought to be in Schulte’s plan:
Increase the employee contribution rate by 1 percent.
Reduce the mostly automatic 3 percent annual cost-of-living adjustment.
Require employees to work longer to increase their final retirement pay.
Create a defined contribution system, like a 401(k), for some management employees.
Action is required by 2013 to control pension costs so the city can provide better basic services and give realistic benefits to current and future retirees.