Nashville Public Employees Respond to Pew Report on Benefits

Close to 200 Metro employees and SEIU members packed the Howard School Building to hear Pew's proposal for benefit changes for city employees.

Close to 200 Metro employees and SEIU members packed the Howard School Building to hear Pew’s proposal for benefit changes for city employees.

Workers on Public Employee Pension and Health Systems: “It Ain’t Broke… Don’t Fix It”

Hundreds of Nashville firefighters, nurses, law enforcement officers, librarians, water technicians, school employees, and other public service workers and retirees spoke out against a proposal by Pew Charitable Trusts to cut public employee and retiree benefits at a meeting of the Study and Formulating Committee.

Pew issued an interim report that explored a proposal for Metro Nashville to close its existing defined-benefit pension plan and shift future employees into a state pension plan that is a combination – or “hybrid” – of a traditional pension and a 401(k)-type defined-contribution plan. A hybrid proposal would shift more of the costs onto employees, who make on average about $33,000/ year according to a recent compensation study. “A lot of us have to take second jobs to make ends meet and many of us are single moms,” said Vanessa Sanders, a labor and delivery nurse at General Hospital. “After taxes, transportation, health insurance, and all the other necessities, we just cannot afford to have more money come out of our paychecks for a retirement contribution.”

Many questioned the need for any changes after the city conducted a similar study of employee benefits in 2012 in which several key adjustments to the plan were already made. Recently, Metro’s actuaries revealed that the city’s defined benefit plan is 83% funded, putting it in the top tier of public pension funds. CNBC reported that in 2013, the Nashville plan’s investment returns were the fifth highest of all city and state plans in the U.S. In other cities and states that have shifted to a “hybrid” type like the one proposed by Pew, costs to taxpayers increased while benefits for beneficiaries decreased. “If changing the system is actually going to cost the city more money and deliver less of a benefit to workers, why the heck would we do it,” asked Rick Beasley, a 911 dispatcher. “It sounds to me like Pew is creating a “lose-lose” situation that leaves taxpayers and employees paying more and getting less.”

“It ain’t broke, and we don’t need Pew fixing it,” said Jack Byrd, a corrections officer. Pew’s work has been funded by a foundation organized by billionaire John Arnold, a former Enron executive and hedge fund manager. Some have criticized Arnold’s efforts, saying that hedge fund managers like Arnold collect generous sums in fees for managing the funds while workers are left with reduced pension benefits.

The Service Employees International Union, Local 205, which represents thousands of Metro employees across dozens of city departments, agencies, and in Metro schools, made it clear that it opposes any changes to employee benefits. “Pew and their allies are proposing a solution to a problem that doesn’t exist,” said Doug Collier, president of Local 205. “If there are any cuts that need to happen in Nashville, it should be to the tax breaks and corporate welfare being handed out to millionaires.”

Pew officials ultimately admitted in their interim report to the Study & Formulating Committee that Metro’s pension is in “solid financial shape,” but did find significant concerns with the unfunded liability the city has as a result of its retiree medical program. The Committee announced that Pew’s work in ongoing and another report is expected in the coming months to examine some remaining issues. The Committee’s next meeting date has not been announced yet.

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