Memphis poised to finalize MLGW generous pension plan again - WMC Action News 5 - Memphis, Tennessee

Memphis poised to finalize MLGW generous pension plan again

(WMC-TV) - How would you like to retire in your forties and still receive more than half of your paycheck for the rest of your life? Odds are your company doesn't provide such a generous retirement plan. But the Memphis City Council is set to finalize such a plan, tomorrow, for MLGW employees, funded in part, by MLGW customers.

You'd be hard pressed to find a private company with pension plan like MLGW's. It's called a "Defined Benefit Plan". That means when you retire the employer guarantees to pay you a fixed monthly income for life.

At MLGW that fixed amount is up to 85 percent of the employee's last salary. This year alone, funding the pension plan cost rate payers 26 million dollars.

"Per President Collins, it was two million dollars more than all of the gas and diesel for the entire MLGW fleet for two-and-a-half years," Memphis City Council Member Kemp Conrad said.

Action News 5 checked with Memphis based companies to see if they offer guaranteed retirement salaries to their new employees.

FedEx, International Paper, and AutoZone no longer offer defined benefit plans for new employees.

MLGW President Jerry Collins argues MLGW pays less than the private sector, and therefore needs better benefits to keep good employees.

"A VP here at MLGW will make somewhere between 140,000 and 190,000 a year depending on how long they've been at MLGW," Collins said. "If they were in the private sector they'd be well above 200,000 a year."

Memphis City Council Member Kemp Conrad believes there is no longer a disparity between pay in the public and private sector.

"These aren't draconian cuts, but these are reasonable modifications that everyone else in the country has to play by."

Unlike most private companies, the City of Memphis and Shelby County both offer guaranteed salaries to their retirees.

But the county recently set a minimum retirement age of 65 for non-public safety employees.

Employees who retire early receive a reduced pension.

The city is poised to make similar changes to its pension plan at some point this year.

Conrad believes MLGW should make similar changes, with a lower retirement age allowed for linemen whose jobs are strenuous.

Collins says he sees no reason to consider changes to the pension which is paid for by the rate payer, employee, and the fund's investments.

"The pension has done a good job of funding itself. Money's been well invested. At this point we aren't contemplating any changes to the pension fund, because it seems to be working very well," Collins said.

Kemp Conrad says if the utility can save ratepayers money, it should.

"We're artificially inflating our utility bills and socking it to people who are really struggling out there."

The Memphis City Council's approval of MLGW's pension will become official at Tuesday's meeting, unless someone who voted yes earlier this month brings up the issue again.

Unlike the city's pension plan, MLGW's fund is very healthy.

Kemp Conrad says that's because MLGW can pass the expense onto the ratepayer unlike the city which would have to pass a noticeable tax increase.

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