UNCOVERING HERENTON'S LUMP SUM PENSION PAYOUT

I have been trying for about four weeks to get all the information about Herenton's big lump sum payout from the City of Memphis pension system. Here are the facts as I know them at this point.

• I asked for the formula from which Herenton's lump sum payment was calculated, who furnished it and where is a lump sum payment authorized in the pension ordinance.
  

  I finally got the following answer. "Former Mayor Herenton's lump sum payment was calculated based on Pension Ordinance Sec. 25-1 (1) b. (total amount of his contributions multiplied by a return multiple). This section also authorizes a lump sum payment to participants who retire or terminate employment."
  

• I did some research on this answer and found some interesting information.
  
• I have attached the old section of the pension ordinance which is now numbered 4-4-1 (b) rather than 25-1 (1) b. You will note that the return multiple for 16 years or more has an asterisk (*) in the return multiple column with the note saying "The multiple for years 16 through 20 will be set prior to third reading after a review of actuarial information from the administration."
  
• Then I found that Ordinance #5303 dated 5/19/09 was passed replacing the asterisks with actual return multiple numbers that increased the return from 3.0 to 4.0. I have attached that ordinance.
  

  
   

So these and other questions remain.

• Did the ordinance, which was passed just before Herenton resigned, increase his payout?
  
• Exactly how was his benefit calculated? Was it $126711 times 4 = $506845 and would the actuarial calculation of the old ordinance language been less?
  
• Why are there no minutes of the pension board meeting where this action went down?
  
• The old schedule of years of service and return multiples which was replaced by Ordinance 5303 stated that "The multiple for years 16 through 20 will be set prior to third reading after a review of actuarial information from the administration."
  

  
   

In looking through past City Council agendas, I find that there are many ordinances passed quietly that increase payouts and pensions but there is no requirement that the cost of these changes be calculated in advance. No wonder they did not want me on the pension board. I will be reporting further on this incestuous pension board which quietly increases their pension benefits at the taxpayers' expense.

Click here to read the recently changed pension ordinance increasing the payouts

Click here to read the old pension ordinance chart