Birmingham Mayor: Pension fund short $378 million

Birmingham Mayor: Pension fund short $378 million
Birminghams Underfunded Pension Plan
BIRMINGHAM, AL (WBRC) – Thirty years of work and no retirement check? Thats the word from Birminghams Mayor who says if the city doesnt do something now, those who retire later will be without a pension.

But a longtime trustee over the pension board feels the mayor should be more transparent about the actual percentage of the pension fund.

In a video Wednesday, Mayor Randall Woodfin says right now theres not enough money going into the citys employee pension fund. Were told the city needs to make up $378 million over the next 30 years to prevent it from running out of money.

“This is a big problem. It didnt develop overnight but grew over the years. And it will take many years and a long-term commitment to make things better, Woodfin said.

The city says in 2001, the pension fund was fully funded. By 2003, Woodfin says the city didnt keep up with the contributions necessary to meet the needs of increased benefits. Were told the financial crisis in 2008 created an even greater decline in the value of the fund.

“I find it very interesting and alarming that you would want to get everyone in a panic as if the system is about to run out of money and its not, Dexter Cunningham, a retired BPD Sgt. and former trustee of the citys supplemental pension board said.

Cunningham feels the mayor is painting a false picture of the situation. In the video, the mayor didnt talk about the current percentage of the pension fund. The city tells WBRC its at 72.95%. The preferred rate is 80%. Cunningham believes the pension fund isnt in dire straits.

If you are a current retiree, you are not impacted. If nothing is done, the city says its credit rating will drop even more then that could create a greater challenge of fully funding pensions. It could result in city jobs getting cut.

Birmingham – Birmingham, Ala.  (WIAT) — A late afternoon video message from Birmingham Mayor Randall Woodfin to city employees and retirees created a frenzy among those who are counting on their pension.  

"Restless is an understatement." said Birmingham Fraternal Order of Police President Sgt. Heath Boackle who started receiving calls shortly after the email went out.

Woodfin said, "Our city pension is underfunded by 378 million dollars. "  He called it a problem 17 years in the making.  Apparently the City of Birmingham has not been adequately funding the city pension.  A problem spanning several administrations.  Woodfin said, "being the son of public servants and a long-time employee for the City of Birmingham, I know the importance of a pension."  According to his statement the city needs a plan to come up an additional 378 million dollars for the next 30 years.

William Lipscomb is the President of  Birmingham Firefighters Local 117 and a board member for the Policemen's and Firemen's Supplemental Pension Fund.  He said going forward it will be important that, "personnel get together and sit down and start coming up with ways to have a solution to this unfunded liability for the retirement relief system."  

Lipscomb says the City of Birmingham, all members of the Pension Retirement Relief Boards, the consultants, actuary, local custodial bank and board members need to meet and come up with creative solutions.

Both Lipscomb and Boackle say they appreciate Mayor Woodfin's transparency about the problem.  "But now it's time to take the bull by the horns and find a solution," said Boackle.

He also expressed concern about what this means for recruitment Birmingham Police Officers. "What has happened is a lot of people are not sure because we try to get recruitment in right now and trying to build up our numbers on law enforcement and when they hear that pension system may be defunct, it really causes some alarm to a lot of members."

Mayor Woodfin concluded his message by saying, "bottom line we will protect our pension."  

The Mayor's office posted a link for frequently asked questions and encouraged people to email questions to PensionQuestions@birminghamal.gov.


Posted in Birmingham