It remains unclear if any city employee pensions can change before contracts are up in June of 2014.
Mayor Greg Stanton has assigned council members to a subcommittee to investigate city employee pensions and how they are formed. The group has met with city staff and has received information on negotiations, paid sick leave, short-term disability and pensionable compensation, but their next question to staff is whether or not any of that can be changed before the current contracts are up. Staff was unable to answer if breaking a contract would have any real effect on the city’s credit rating, though it was suggested that groups with AAA ratings don’t break contracts. City employee benefits are legal contracts.
Councilman Daniel Valenzuela has said he will not advocate for any plan that breaks a contract with city union groups.
Many city employees expressed concern during the last subcommittee meeting, which was also called as a special meeting for all council members to attend. The employees worry that promises they were made during negotiations will not be kept.
The four council members on the subcommittee seemed to suggest that the changes they will bring to full council for approval once the subcommittee has done its research will most likely apply only to new employees or would only go into effect after the next labor negotiations are approved by the various union groups.
The city of Phoenix recently sent the issue of pension reform to voters and approved a plan that changed the amount the city and employees contribute to pensions. The Pension Fairness and Spiking Elimination Ad Hoc Subcommittee is exploring other benefits included in city pensions. It was created after a public outcry for the city to get rid of pension spiking — or the ability of city employees to cash in unused paid leave and other benefits at the end of their employment to boost their retirement.
The subcommittee asked city staff to identify each practice that qualifies as pension spiking, identify changes that can be made administratively versus which ones must be made during contract negotiations and create a timeline for implementing reforms before the next meeting. The group will present its recommended reforms to the full City Council on Oct. 4.
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