City Leaders Explore Solutions to the Pension Fund Challenge
NLC’s Neil Bomberg and Elizabeth Kellar, president and chief executive officer of the Center for State and Local Government Excellence, will serve as presenters for the interactive seminar, "Leading Your City through the Pension Fund Challenge," on Sunday, March 9, 2014 at the Congressional City Conference in Washington, D.C.
Cities and towns across America are considering ways to save their taxpayers money while meeting all of their contractual obligations, especially to their employees. Pension plans are among the contractual obligations that can have the greatest impact on a city's fiscal health.
While each city wants to do what is best for police officers and firefighters, sanitation workers, road crews and others who work hard to ensure that their city runs safely and smoothly, city leaders are having to consider innovative ways to manage their municipal pension system, along with wages and other benefits.
Whether a city's pension system is run by the state or operated locally, city officials are taking a close look at how it is operating and how well it is funded to determine if it is sustainable, and if not, are deciding what should be done to ensure that their community will be able to meet its contractual obligations going forward.
Of course, there is no simple or single solution. How cities approach this issue very much depends on the politics of the community, the tax base, the willingness of the electorate to fund worker benefit programs and other key variables.
What is clear is that this issue will be decided by the federal government unless cities and towns across America find local solutions first.
Members of Congress are looking to establish rules and regulations that will govern local pension plans, and are looking to require that cities report pensions to the U.S. Department of Treasury on an annual basis. Failure to do so might result in a city losing its ability to issue municipal bonds.
Federal agencies such as the Securities and Exchange Commission and non-governmental agencies like the Governmental Accounting Standards Board and the Municipal Securities Rulemaking Board are looking to place stringent new requirements on the ability of cities ability to develop and implement effective retirement systems on behalf of municipal workers.
Outside of government, Wall Street investors are looking for ways to transform city pension systems into yet another privately run investment system from which they will reap huge financial returns at the expense of city workers and residents.
During the Leading your City through the Pension Fund Challenge seminar, local officials will have the opportunity to review policy solutions that address local needs and may help avert the threat of federal and non-governmental agency interference. This half-day NLC University training seminar will be held on the morning of Sunday, March 9th during the Congressional City Conference. Participants will develop an understanding of the key issues, identify important questions for city leaders to ask and leave with a better understanding of possible solutions, such as modified defined benefits plans, supplemental 457 plans, larger employee contributions, increased vesting periods and later standard retirement age.
Neil Bomberg is a program director in NLC's Federal Advocacy group. His work focuses on health care, workforce development, education, public welfare, collective bargaining and public pensions.