A DROP IN THE BUCKET

I have been investigating the huge unfunded liability associated with the promises made by our local politicians to our public retirees concerning paying most of their health insurance premiums after retirement. To date they have been paying only the annual actual costs, not the future actuarial costs. This is called OPEB (Other Post Employment Benefits). The unfunded liability according to the actuarial reports for the City of Memphis, MLGW, Shelby County and the Memphis City School System is over $3 BILLION DOLLARS.

Recently I talked to people at Shelby County and they are talking about funding this liability up to possibly $20 million this year. The MLGW set up a fund in 1997 but has not contributed much if any since then. The City of Memphis in their 2009 budget has said that they are contributing $6 million dollars towards their unfunded liability of $823 million. (See attached 2009 budget pages, page 2 of 4). This shows that they will not keep providing this benefit in the future and they have indicated that they will cut this benefit soon. There is no way we can afford these promises and it is time now to tell the truth to the present and future retirees so that they can make other arrangements for their health care in the future.

POLITICAL DIVISION	OPEB UNFUNDED LIABILITY
City of Memphis	$823,000,000
MLGW	$709,000,000
Shelby County	$353,000,000

Memphis City Schools $1,250,000,000

Total $3,125,000,000