CINCINNATI (WKRC) – More than a decade after a federal agreement was intended to stabilize Cincinnati\u2019s pension system, the city\u2019s retirement fund is again facing serious financial strain\u2014and officials are pushing a $100 million infusion they say is needed to avoid deeper consequences for employees and taxpayers.<\/p>\n
Former Cincinnati Mayor John Cranley called a previous crisis last decade “existential,” before the city reached a federal consent decree in 2015 with city workers’ unions addressing the problem at the time.<\/p>\n
More than a decade after a federal agreement was intended to stabilize Cincinnati\u2019s pension system, the city\u2019s retirement fund is again facing serious financial strain\u2014and officials are pushing a $100 million infusion they say is needed to avoid deeper consequences for employees and taxpayers. (WKRC)<\/p>\n<\/p>\n
But the pension\u2019s finances have deteriorated again this decade, driven by sluggish market returns, early retirements in 2020, and longer life expectancies.<\/p>\n
The city pension is now nearly $850 million underfunded, with only 68% of the money it needs to pay future benefits. Projections show the fund could drop to 18% funded by 2045 if no action is taken.<\/p>\n
\u201cI think the red flag is up,\u201d Mayor Aftab Pureval said. \u201cAgain, when we came into office, it was 18% funded for 2045. That is a flashing red light, which is why we acted so quickly.\u201d<\/p>\n
Cincinnati\u2019s pension system is the oldest in Ohio and covers nearly 4,400 current employees\u2014including road crews, health department workers, and other city staff\u2014as well as 4,100 retirees.<\/p>\n
Asked what could happen without intervention, Pureval said:<\/p>\n
\u201cThe pension would fail and bankrupt the city. It would be catastrophic for the fiscal health of the city moving forward.\u201d<\/p>\n
Pureval\u2019s proposal would infuse the pension fund with $100 million. Half would come immediately from a reserve fund set aside for tax refunds to people working from home during COVID\u2014refunds that have not materialized. The other half would come over time from enterprise funds overseen by Cincinnati Water Works and the Metropolitan Sewer District.<\/p>\n
The city also is vowing to increase its annual pension contribution to what Pureval called “a spectrum” between 19.25% and 21.5% of total payroll.<\/p>\n
City Manager Sheryl Long also emailed affected workers this week, saying the proposal would increase employee contributions from 9% of pay to 10% over four years.<\/p>\n
Pureval said he has been speaking with City Council about the plan.<\/p>\n
\u201cAnd I will say that I\u2019ve spoken to all the council members. They all believe this is a home run,\u201d said Pureval.<\/p>\n
Unions representing city employees either did not respond or declined to comment as they evaluate the proposal. City workers do not qualify for Social Security, making their pensions their main source of retirement funds.<\/p>\n
Pureval’s proposal goes before the council’s budget committee next week, with a full council vote expected soon. But the city still needs to get approval from the federal judge overseeing the consent decree as well as the unions, while the Hamilton County Commission also needs to approve the part of the deal involving the sewer district since the county owns that agency.<\/p>\n
That process could take several months, with the goal of completing it by July 1, when the new city budget would go into effect.<\/p>\n","protected":false},"excerpt":{"rendered":"CINCINNATI (WKRC) – More than a decade after a federal agreement was intended to stabilize Cincinnati\u2019s pension system,…\n","protected":false},"author":2,"featured_media":479071,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[28,147,530],"class_list":["post-479070","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/479070","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=479070"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/479070\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/479071"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=479070"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=479070"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=479070"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}