THE PUBLIC PENSION SITUATION IN MEMPHIS AND SHELBY COUNTY

I finally received the update of the city of Memphis pension report dated March 31, 2009. I have attached that report and the report from the end of the last fiscal year ending July 30, 2009. It shows that the market value of the fund dropped from $2.11 billion to $1.45 billion, almost by 1/3. Also I have attached a report on who is on the City of Memphis pension board. This is quite interesting and almost incestuous. Talk about foxes guarding the henhouse. The members of the pension board are

• The Mayor or his designee
  
• The comptroller
  
• 5 employees with at least 10 years of service
  
• 1 citizen member
  
• 1 retiree of the plan
  
• 1 member of the City Council, non voting
  
• Director of personnel, ex officio member, non voting
  

The important points here are two facts.

1. The pension promises are full faith and credit promises backed up by the taxing authority of your elected officials regardless of our ability to pay.
   
2. This whole process needs to be opened up with more public members (read taxpayers) on the pension board as it is their taxes that guarantee these promised pensions. The employees do contribute but so do the taxpayers and the guarantee is from the taxpayers.
   

Unless we have a miraculous market recovery, we will see huge pension increases in contributions from the taxpayers. We need to reform this system so that future new employees have a defined contribution plan (like a 401k) rather than a defined benefit plan. This is what taxpayers in the "for profit" world have and this is what public employees should have.

Click here to see the June 30, 2008 pension valuation report

Click here to see the latest monthly pension valuation report to see what it has lost

Click here to see who is on the pension board watching over your money