Council, Harrisburg look to eliminate city pension perk

The pending resignation of Managing Director Camille Cates Barnett brought to light a controversial Philadelphia pension perk which gives employees who have not yet vested in the city's plan the right to buy their way into the program, provided they have worked in a public sector job elsewhere.

In Barnett's case, she has the chance to get a $49,880 annual pension for life, so long as she pays $120,451 upfront, even though she worked for the city for only two years.

Barnett has refused to comment on this, but City Council and the state legislature are now moving to eliminate that pension perk for any worker who has been with the city for less than five years.

Councilman Frank DiCicco will introduce the legislation in City Council this morning, while State Sen. Larry Farnese plans on introducing similar legislation in Harrisburg to ensure there are no questions about the city's authority to eliminate the pension option.

The laws would not apply in Barnett's case, only to future pension plan applicants, DiCicco said.

A copy of Sen. Farnese's press release on the matter is below.

April 7, 2010----- Senator Farnese today announced that he is drafting legislation that would prohibit city employees from using time earned in other jurisdictions to buy into the Philadelphia’s pension system unless they have worked for the City of Philadelphia for at least 5 years.

It was recently disclosed that the outgoing managing director was eligible to buy into the pension system after only two years of service, which entitled her to an annual lifetime benefit of nearly $50,000 per year. Senator Farnese’s legislation would ban this practice. His proposal would prohibit non-union, non-civil service employees from counting time worked in government jobs outside Philadelphia to reach the minimum 5- year vesting period.

“Continuing this practice is unfair to the taxpayers,” said Senator Farnese. “It also highlights a disparity in current pension policies under which police officers and firefighters, who risk their lives daily protecting the citizens of the city, do not receive such generous perks.”

Senator Farnese compared this current pension perk to the DROP perk for elected officials, which he helped to eliminate last year.

“At a time when many families are struggling to make ends meet, it is a matter of good government to reform this policy by closing this loophole,” said Senator Farnese.

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