WHEREAS, In 2004, the City of Philadelphia decided to pay the minimal municipal obligation on its pension bonds, which will result in $255.9 million reduction in pension payments from 2005 to 2009; and
WHEREAS, Despite the change in payment according to FY05-09 five year plan the city will have to contribute significantly more from the general fund to meet its pension obligation; and
WHEREAS, To meet its contributions the City of Philadelphia must contribute $712 million more towards pension obligations in the FY05-09 plan then it predicted in the FY02-06 five year plan which consistently missed pension fund earning targets; and
WHEREAS, In FY02 the pension fund obligations represented 6.9% of the general fund; and
WHEREAS, By FY09 the pension obligations are projected to increase to 12.7% of the general fund, an increase of over 80%; and
WHEREAS, To deal with continually missed earning targets and the growing portion of the general fund consumed by pension obligations, the administration is proposing to move from a defined pension benefit to a defined pension contribution; and
WHEREAS, A defined pension contribution plan would allow for a set contribution to each employee as opposed to the current plan which provides a defined pension benefit for each employee; and
WHEREAS, Under the new proposal, all current City Employees represented by our municipal unions will remain under the defined benefit pension plan but all new current employees, including the our municipal unions, will be required to participate in the defined contribution plan; now therefore
RESOLVED, BY THE COUNCIL OF THE CITY OF PHILADELPHIA, Authorizes the Committee on Labor and Civil Service to hold Public Hearings regarding the Administrations proposal to move from a defined benefit pension plan to a defined contribution plan and further authorizing the committee to see what effects this has on the state of pensions as it pertains to present and future retiring Philadelphia City employees.
End