By: Nick Porter
CHATTANOOGA, TN (UTC/ The Loop) – The Chattanooga City Council approved the pension board’s recommended legislation to address the massive debt to the pension fund.
The drawn out six-month debate on the public safety employees’ retirement benefits came to a close Tuesday evening when the Chattanooga City Council unanimously approved the first reading of the new legislation.
The plan approved by the pension task force appointed by Mayor Andy Berke’s, is supposed to save Chattanooga $227 million over the next 25 years and make sure future retirement benefits are secure.
According to a recent evaluation by the city, the budget currently can only supply 54 percent of the promised benefits, and with the new legislation the city can afford 64 percent of the benefits.
Before the vote, the mayor said that the plan before them would secure a pension benefit for employees and retirees in the future, a promise he and many others agree could not be guaranteed otherwise.
“The changes that you’re about to consider to our police and fire pension fund are really an important moment in our city,” Berke said.
The savings stem primarily from a reduced cost-of-living adjustment to retirees’ benefits. Currently, pension checks go up 3 percent every year to account for inflation. The new plan would move the COLA to a tiered system in which retirees receive, on average, an annual adjustment of 1.5 percent.