Rising City Pension Costs Plague Knoxville
The City of Knoxville is staring at rising pension costs that could be as high as $30 million in just eight years.
The biggest problems with the above statement is we do not know what the pension cost will be in 2019. Because Knoxville, like most local and state governments, operates its pension as a defined-benefit plan it is impossible to know what the actual costs to taxpayers will be.
Should the stock market tank more than it has recently, should health care costs keep skyrocketing, should government employees keep receiving raises that are unheard of in the private sector during a deep recession (read our blog on Knoxvilles extra-generous compensation here), and its possible the citys pension liability will grow well beyond $30 million.
Knoxvilles mayoral candidates recently debated what to do with a growing pension problem; a problem that promises to usurp funding away from public safety, road construction and economic development in order to fulfill unsustainable promises made to government employees. The vast majority of responses were underwhelming.
Most candidates preferred a wait-and-see approach to evaluate what Mayor Brown pension taskforce recommends. AFP-Tennessee disagrees with this approach.
Americans for Prosperity-Tennessee wants to see significant pension reform at the state and local levels. The solution to the public sector pension crisis is admitting we can no longer afford a defined-benefit system and move to a defined-contribution system. A defined-contribution system is what the vast majority of private sector employers offer, and is the only way to predict costs and ensure viability.
A few candidates supported pension reform you can read the Knox New Senintels report here – and they need to know you agree with their position.