Unions, city reach pension deal

(WMC-TV) - Memphis Mayor A C Wharton was prepared to present his pension reform plan but instead, there was a huge breakthrough in the battle between the city and public safety labor unions.

At two o'clock Tuesday afternoon, with the wives of Memphis police officers protesting outside city hall, the city's chief administrative officer told the council the two sides reached an agreement on employee pensions.

And while the council approved vote the plan, other labor disagreements are still up in the air.

"We think we have reached a consensus," George Little, the city's CAO, told a council committee Tuesday afternoon.

Little said the benefits match played a big role in the agreement between the city and union leaders from the Memphis Police and Fire Departments.

The unions proposed to raise the employee contributions for non-vested employees, starting at 6.5 percent next July and increasing to 8 percent by 2015.

In 2012, new hires will start contributing 8 percent.

In exchange, the city will start matching the 8 percent contribution in 3 years, depending upon the city's financial status.

"This helped to close the gap between the union's proposed changes and the administration's proposed changes," said Little.

But one councilman wasn't happy the information became available so close to the vote.

"I'm really tired of getting last-minute information," said Joe Brown.

The agreement also includes a set retirement age for new hires on or after July 1, 2012. General employees would have a minimum retirement age of 62, with a requirement of 25 years of service. Public Safety employee would have a retirement age of 52 with 25 years of service.

The benefits accrual rate for new hires drops to 2.25 percent starting next July. Current employees would keep their 2.5 percent accrual rate.

"For once, I think there's a general acknowledgement that we do need to make certain changes in the pension plan to ensure solvency for employees and at the same time balance the interest of taxpayers so we don't have to increase our costs or decrease services," said Little.

"We will definitely look over the wording and if it reflects what we discussed, this would be - I think - a good thing for the city," said Michael Williams, a vice president with the Memphis Police Association.

"We're glad that after all the battles we had over the past year," said Joe Norman, a vice president with the Memphis Fire Fighters Association. "That we were actually able to come to the table with the city administration."

The package affects all city employees - not just fire and police.

The city will form a pension oversight committee which will start meeting January 1.

Meanwhile, the unions and city are still in court over the 4.6 percent pay cut.

The council is also scheduled to vote on a one-time, 1.5 percent employee bonus tonight.

Copyright 2011 WMC-TV. All rights reserved.