Dean committee recommends raising Metro pension vesting from 5 to 10 years

Tuesday, March 27, 2012 at 1:34pm

Eligibility changes to Metro’s employee benefit system could be coming now that a Mayor Karl Dean-appointed committee has recommended adopting 10-year vesting for service pensions, overhauling the current five-year model.

The move, if approved in Dean’s next budget, would require Metro workers devote a full decade of work to the government before becoming eligible for pensions.

On paper, the adjustment –– which the mayor’s Study and Formulating Committee recommended in a March 22 final report –– wouldn’t seem popular for the union that represents Metro workers.

But leaders of the Service Employees International Union Local 205 say they can live with the change because their worst fear didn’t come true: The committee has advised sticking with a defined benefit plan, which guarantees a regular benefit on retirement, and not adopting a defined contribution system in which future benefits are often dependent on the market.

“We’re real pleased to see that they’re recommending we stick with a defined pension benefit,” said Doug Collier, president of SEIU Local 205. “It’s saved many people over the years from being in poverty. It’s something that they’ve worked for, something they could count on when they’re in their retirement age, and something that whether the economy is up or down, they have a dependable revenue source coming in each month.”

“We have no qualms or problems with that whatsoever,” he said of 10-year vesting. “We want to make sure the career workers are taken care of.”

The five-member Study and Formulating Committee, which the Metro Charter requires the mayor appoint every five years, has met since May to study the health benefits and pension plans for city workers. Drastic modifications weren’t warranted, the report found.

“We did not conclude that there was a financial crisis related to pension and benefits that warranted major changes in the system,” the committee’s final report stated.

“The committee was in agreement that the current defined benefit plan platform for Metro’s pension system appears to still be well funded, managed and appropriate at this time,” the report continued.

Dean’s administration is set to propose a budget for the 2012-13 fiscal year in May. Employee benefit changes would be subject to Metro Employee Benefit Board and Metro Council approval.

“When we started this process, the whole idea was there’s a balancing act between fiscal responsibility and making sure that you have a good system of benefits for employees,” Metro Finance Director Rich Riebeling said.

“They looked at a number of options,” he said. “What they’ve done is made tweaks to the system that bring us more in line and more in conformity with the industry standard.”

Moving to a 10-year vesting requirement would actually signal a return for Metro. The city had a 10-year requirement until 2001, when former Mayor Bill Purcell changed the system to five years.

David Manning, Purcell’s finance director, said the administration made the move to put Metro in better position to compete with the state for employees. “The state has five-year vesting,” Manning said. “Particularly, when you’re trying to attract someone who has an opportunity at the state, that becomes a significant factor.”


12 Comments on this post:

By: BigPapa on 3/27/12 at 11:43

Metro should scrap the pension all together. Any new hires from 2012 on just get the 401k.

By: Kosh III on 3/27/12 at 1:34

401K You've got to be kidding. I guess you don't have a 401k or you'd remember being almost wiped out in 2008 by the Bush Recession and the greed of Wall Street which nearly wrecked the economy.

By: BigPapa on 3/27/12 at 1:56

Virtually no private companies offer pensions. There's a reason for that. YOU should be responsible for YOUR retirement.

Maybe you're like Kosh and didnt save or invested poorly, but a guaranteed income after retirement shouldn't be the responsibility of the Metro tax payer.

By: bfra on 3/27/12 at 3:52

Neither should guaranteed health insurance for the entire family, for life, as with the Metro Councilpeople!

By: govskeptic on 3/28/12 at 5:28

I thought the change in 2001 was not a good idea and no logical reason
for it at the time. The same Bellevue Council member that gave us the
extraordinary low service time for council members to get lifetime
payment for health care also headed up the reduction to 5 yrs from 10 yrs.

By: budlight on 3/28/12 at 7:17

None of this matters if our taxes go up -- and Dean is proposing that as we type. And did anyone see the increase in metro gov't services lately? I thought so. They are decreasing as we speak. Brush pick up; garbage all over the streets; no one getting scolded for parking 10 cars on the lawn and the list goes on and on. Higher taxes. Lower services! What does not sound right about that?

By: Rasputin72 on 3/28/12 at 8:30

I think that would be a good idea at the present time. As the city gets closer to bankruptcy then the pensions should be eliminated as they are now structured

By: cannoneer2 on 3/28/12 at 8:37

I see it didn't take long for the private industry crybabies to show up. They want to ensure that all the world is as miserably employed as they are. You too can quit whining and get a job with Metro, and have a better retirement plan for yourself.

By: wasaw on 3/28/12 at 9:55

Metro had 10 year vetting until former Mayor Bill Purcell needed support from the then 40 man council. Purcell bought their support by lowering the then 10 year vetting to a 5 year vetting. It had nothing to do with difficulty hiring quality employees. It was purely political. The best way to get political support is to pay them. Local politicians are no different than the clowns we have in DC.

Dean now has the council in his pocket and doesn't need the 5 year vet anymore. The council members he depends on have already put in the required 5 years. Dean's crew has already met their 5 year requirement. Again, it never had anyhting to do with finding quality employees.

Keep in mind, the retirement at five or ten years would be minisule. The police and fire personnel earn 2% per year for their first 25 years, 1.75% for each year thereafter. All other Metro employees earn 1.75 for all their service time.

By: MusicCity615 on 3/28/12 at 11:33


Please go back to Greece. Thanks

By: morpheus120 on 3/29/12 at 3:26

Another comment thread featuring the Fox News brain trust of Middle Tennessee!

Let the fact-check begin!!

BigPapa: The reason private companies don't offer pensions anymore is because they want that money in their own pockets, not going to the workers. Except for the ones that really want to keep their workers like GE, Exxon, AT&T, Verizon, Ford, Lockheed Martin, UPS, Honeywell, Johnson & Johnson, Procter & Gamble, Hewlett-Packard, 3M, Pepsi, Bank of America, Citigroup, and Wachovia. Are they all socialists too?

BFRA: Why shouldn't people who have jobs not have health insurance? Oh, and city employees don't get their health benefits for free. They pay for them.

Budlight: What kind of backwards idiot whines about services going down and then says we shouldn't have taxes to pay for them? I'll tell you which kind - one that wants something for nothing. Interesting position for a conservative to take, but hey, they've pretty much done that already by opposing the individual mandate in "Obamacare".

Rasputin72: The city is not "closer to bankruptcy". Nashville is solvent in the short term and is a well-run city, fiscally-speaking. There are long-term solvency risks, though, and that has nothing to do with pension or benefit obligations - it has to do with the new Convention Center. Take that up with Mayor Dean and the welfare queens at the Nashville Chamber of Commerce (Republicans, naturally) who tell him what to do.

Wasaw: You are half right - which makes you the smartest person among this group of idiots. While Bill Purcell pushed for 5-year vesting for the pension, it was not for the benefit of Council members. Council does not get a retirement benefit. But mayors and their staffs (who can only serve 8 years) do. Now are you getting it?

Have a nice day and remember to thank your public employees. They make less than you do and have to put up with this kind of s**t from a bunch of ignorant dittoheads who have no business going anywhere near a voting booth.

By: morpheus120 on 3/29/12 at 3:27

Oh, and I guess you rocket scientists haven't figured out that if one of Davidson County's largest employers quits offering good benefits, then it takes the incentive away from the rest of our businesses to offer them.

Why are you all against the free market and competition all of a sudden?