Mayor Kasim Reed met with the Pension Review Panel on Monday for an update on the status of the City’s pension plans for employees and to advance his goal of responsible pension reform in an open, transparent manner.
During his campaign, Mayor Reed highlighted pension reform as one of the most critical issues facing the City. One of his first acts in office was to convene a 14-member Pension Review Panel, comprised of subject matter experts and key stakeholders from the public and private sectors, to examine the current challenges facing the City’s pension plan and identify possible solutions. Mayor Reed’s primary objective is to ensure the long-term financial solvency of the City of Atlanta while also recognizing the service and dedication of thousands of employees.
“The stark reality is that one out of every five tax dollars from Atlanta’s general fund is currently going to pay for a pension system which is increasingly unsustainable. We need to face this challenge head on, being mindful of the responsibility to taxpayers who fund that pension system, without breaking faith with the public servants who have dedicated their lives to the City,” said Mayor Kasim Reed.
Reed continued, “During the campaign, the challenges facing Atlanta due to our pension plans became more and more evident. As Mayor, correcting our course and ensuring that we continue down a path of fiscal responsibility is one of my top priorities. I will review the findings of this panel thoroughly and decide what the next steps are as we balance the best interests of all parties including our employees and taxpayers. But I want to be clear – I will not raise property taxes. That option will not be considered.”
During the presentation, John Mellott, chair of the Pension Review Panel, informed the Mayor of several key findings:
- The annual pension contribution has risen 13 per cent every year over the past ten years and is projected to continue to grow. By law, the City of Atlanta is required to pay these costs and it cannot be deferred.
- $144M in 2009, up from $55M in 2001
- 70 percent of the annual pension expense is for the unfunded liability
- The unfunded liability has grown 21 percent per year since 2001, and the pension funds have dropped from 83 to 53 percent funded.
- $1.5B in 2009, up from $321M in 2001
- Maintaining the status quo will result in pensions becoming an even greater percentage of the City’s annual costs.
“While the challenges facing Atlanta’s pension plan may seem daunting, the Pension Review Panel will examine options to alleviate this unsustainable growth and will present a comprehensive set of potential solutions to the Mayor,” Mellott said. “I have every bit of confidence in the team that has been assembled and we will be drawing on their considerable level of expertise as we review the complex issues surrounding the pension.”
Mellott was named Chair of the Pension Review Panel during the mayoral transition in December 2009. Mellott is a retired senior executive of Cox Enterprises and was most recently publisher of the Atlanta Journal-Constitution. He has held senior financial roles within Cox, including Treasurer and Vice President of Development and Planning and is a certified public accountant.
The Pension Review Panel members include:
- John C. Mellott, Chair of the Pension Review Panel
- Jim Wells, Suntrust Bank
- Ed Heys, Deloitte
- Ben Johnson, Alston & Bird
- Richard Anderson, Delta Airlines
- Duane Portman, Home Depot
- Dan Kolber, Baker Donelson
- Howard Shook, Atlanta City Council
- Calvin Vismale, Advisor to Atlanta City Council
- Jim Daws, International Association of Fire Fighters (IAFF)
- Rod Edmond, City of Atlanta
- Scott Kreher, International Brotherhood of Police Officers (IBPO)
- Jeanette Lebrecht, City of Atlanta
- Jon Calloway, Professional Association of City Employees (PACE)
- In addition to Mayor Reed and the Pension Review Panel, several Atlanta City Council members, concerned citizens and members of the media attended the presentation. The Mayor has asked the panel to present a list of potential options on how best to move forward within the next 30 days.
Copy of the presentation
# # #
For more information about this and services of the City of Atlanta, visit our website at
www.atlantaga.gov or watch City Channel 26