Pick up the pace on KC's pension reforms
The Kansas City Star
Pick up the pace on KC’s pension reforms
Fortunately, it appears pension reform is just around the corner at City Hall.
Hold that thought. That’s actually the memo Kansas City officials put out back in April.
And then again in July.
Now it’s mid-September and the multimillion-dollar question remains: When will City Manager Troy Schulte and the rest of a special review group he put together — mostly union personnel, police officials and other city employees — unveil a plan to fix the city’s four plans?
Such a move would save significant money for taxpayers and keep the systems healthy enough to provide guaranteed monthly payments for city workers.
City Council member Jan Marcason has thrown out a reasonable challenge: She wants to see Schulte’s proposal on Sept. 26, at the next meeting of the council’s finance committee she leads.
“We are serious about pension reform,” she said.
Good to hear, because Schulte has said the city’s current plans are “unsustainable.” Meanwhile, other cities and states have been forced to reduce benefits or increase the lug on taxpayers to meet their retirement obligations.
Kansas City isn’t yet in that dire of a situation, but needs to act soon to make sure it can meet its obligations.
Mayor Sly James is comfortable with the progress being made, a spokesman said, while conceding it’s taking longer than the mayor would have liked. Part of that is because of the tough negotiating positions taken by various factions, especially representatives of firefighters and police officers.
No question, reform is complex. However, the Pension System Task Force of civic leaders, city officials and union representatives in 2011 examined the issue for months in public sessions, hired a taxpayer-financed consultant for around $100,000 and issued solid recommendations last November. The highlights:
Increase the employee contribution rate by a minimum of 1 percent.
Reduce the mostly automatic 3 percent annual cost-of-living adjustment for many retirees.
Require employees to work a bit longer to increase their final retirement pay.
Cap taxpayers’ pension funding obligations.
Herb Kohn, task force chairman, pointed out last week that his group had put forward a plan “with relatively minimum changes for current and future pensioners.” He added, “We would have expected that plan to have been implemented or very far along by now.”
But it hasn’t happened.
Part of the reason is that some factions of city workers — especially police officers — are quite upset right now. The Fraternal Order of Police has even gone to court to try to stop another responsible change pursued by City Hall, to form a unified city/police health insurance plan.
Fire union leader Mike Cambiano said he’s hoping the city will let the different pension systems “pick their own medicine.” That is, allow each decide to how it wants to change benefits and how they are financed. Cambiano said firefighters probably would opt to contribute a little more now in return for not reducing cost-of-living raises for retirees.
However, if all four plans go their own ways, that could further complicate the task.
The City Council should adopt final recommendations this year so it can ask the General Assembly in early 2013 to endorse any changes to pensions for the state-controlled police force.
The city wants all reforms in place by May 1, start of the next budget year. Any delays past that point would be inexcusable.