By Mike Dunn
PHILADELPHIA (CBS) — A city councilman is pushing a major overhaul to the pension fund for city workers — a fund that he says is dragging down the rest of the City Hall budget.
“We need to get to this,” says Councilman-At-Large David Oh, “because the more you put it off, the worse it hurts this city.”
Oh says the amount of general tax dollars used to prop up the pension fund has escalated over the past decade.
“Ten years ago, we were paying about $200 million out of our operating budget from our taxpayers for the pension,” he says. “Now we’re paying $600 million (each year). And so many people know what we could do if we had that $400 million.”
So Oh is floating a plan that he believes would eventually right the sinking pension fund ship. One change would stop the rampant underfunding of the pension: the city would be forced to contribute no less than the annual required contribution set by the Governmental Accounting Standards Board, an independent group that sets accounting and reporting standards for municipalities. Oh’s plan would also force the pension board’s projections to be — in his view — more realistic.
“The assumptions are important because we could always assume a bright, brilliant future, and then we assume we’re going to receive lots of money,” Oh says. “But a retirement fund, as most people know, should be more conservative.”
Oh also wants four new members on the pension board who would be financial and accounting professionals, and he wants board meeting minutes to be posted on its website for greater transparency.
If his plan is approved by the full Council and the mayor, the changes would be then put to voters as a ballot referendum in the November general election. Oh says this overhaul is sorely needed.
“It’s a retirement fund for the workers,” he says. “It’s not meant to be a funding source for the city.”