Council amendment would close loophole in city's pension plan - WMC Action News 5 - Memphis, Tennessee

Council amendment would close loophole in city's pension plan

By Jamel Major - bio | email | Twitter | Facebook

MEMPHIS, TN (WMC-TV) - Memphis City Council members are trying to change a loophole in the city's pension plan that some are calling outrageous.

City Council member Jim Strickland has introduced an amendment to the city pension ordinance which he says would end the practice of awarding pension benefits to some employees.

"No employee should be able to receive a pension, when they are 35 or 40-years-old, for the rest of their lives," he said.

Under the current pension rule, appointed and elected Memphis city officials can retire after only 12 years of service. 

"What the council did in 2004 was say nobody else hired after this time can get the pension," Strickland said. "But the loophole is that people in the lower positions, if they get appointed to those higher paying positions, they automatically click into that 12 year pension plan, and what we're trying to do is cut it off.

According to city records obtained by Action News 5, nearly 70 city employees have already taken early retirement, including former Mayor Willie Herenton appointees Ken Moody and Yalanda McFadgon.  Both are key players in the Memphis Sexual Assault Resource Center and Memphis Animal Shelter controversies.

And, several hundred employees are still eligible to receive benefits under the 12 year rule.

"The pension fund, although is under funded right now, is not so low that we're in danger," Strickland said. "But if enough people get on this 12 year pension, that could be a possibility."

The Council is expected to take a final vote on the amendment in the next four to six weeks.

Copyright 2009 WMC-TV. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Powered by Frankly