Fort Worth Moves Closer To Finding Fix For $1.6 Billion Shortfall
The Fort Worth City Council voted Tuesday night to approve changes to shore up its ailing employee retirement fund. The pension plan for police, firefighters and workers across city government faces a $1.6 billion shortfall. The council vote is just one step toward filling that gap.
The looming funding gap, if left unchecked, means the retirement fund could run out of money as early as 2040. That puts at risk the retirement security of thousands of current and former city workers who do not pay into Social Security.
And the pension problems have already brought down the city’s bond rating, making it more expensive for Fort Worth to borrow money or issue bonds to pay for public works as the city population heads toward 900,000 people.
For months, Fort Worth’s city leadership and representatives from labor groups have been working to find a plan that everyone could agree to. Last month, a different package of proposed changes failed to win support from the city council amid labor concerns, which led to a marathon round of negotiating to get to the package approved on Tuesday.
Still, no one was celebrating the proposed plan to fix the problem.
“This is a critical vote tonight and this proposal is an important step forward. I know it’s deeply important for each and every one of you, and these decisions like this never come lightly,” Fort Worth Mayor Betsy Price said.
The clock is ticking to find a home-grown solution for the troubled retirement fund before lawmakers in Austin decide to force a fix on the city. That's a scenario that city and labor leaders have said they hope to avoid.
The proposal approved by the city council still needs to win support from a majority of all current city workers in order for the changes to go into effect. The city is planning workshops to educate employees about the details of the proposed plan.
Under the proposal, the city would put more taxpayer money into the fund, a 4.5 percent increase or about $25 million more each year at current budget levels. Employees would put an average of 3.5 percent more of their paychecks into the fund, and agree take fewer benefits when they retire.
One group left untouched are city workers who have already retired. Earlier proposals would have changed their benefits – but labor leaders declared the plans dead on arrival. The current plan leaves their benefits intact.
“You listened to our stories, you read our letters, you listened to us whine. For that we will be profoundly grateful,” said Marsha Anderson, president of the Coalition of Retired Workers.
Not everyone was as grateful. Earnest Thomas from the Association of City Employees says he doesn’t like the idea of retiring with fewer benefits.
“We give our all to the citizens of Fort Worth, and we want the benefits promised to us when we were hired on with the city of Fort Worth,” he said.
Leaders of police and firefighter groups didn’t endorse the proposed changes, but they aren’t opposing them, either.
Workers are expected to vote early next year.