Nutter administration pursues pension changes

From this morning's Philadelphia Inquirer, a look at some pension program changes the Nutter administration would like to make. The first few paragraphs can be seen below.

As part of its push to reduce the city's long-term pension costs, the Nutter administration will ask City Council on Thursday to take up legislation revamping retirement benefits for a class of about 5,000 municipal workers not represented by unions.

The proposed changes - which include the creation of a voluntary 401(k)-type plan and higher employee contribution rates for those who opt to stay in the city's pension plan - would apply only to new hires, not current workers.

So there is unlikely to be much in the way of budget savings for the city, at least at first. But the Nutter administration contends the proposal has the potential for significant long-term savings, particularly if large numbers of employees opt to sign up for a 401(k)-type defined contribution plan instead of the traditional pension.

"We should save some money in the short term. But it's over the long term as more and more people decide to take the defined-contribution option that I think you'll see real savings," said city Finance Director Rob Dubow.

"The other important thing for us is, it starts to shift some of the investment risks - and benefits - over to employees and away from the taxpayers," Dubow said.

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