Thursday November 17 (2011) the City of Phoenix had a public hearing to solicit input to the City of Phoenix Pension Reform Task Force.  At this public meeting about 98% of the audience and people addressing the Pension Task Force were City of Phoenix employees. 

The Pension Reform Task Force  were appointed by the Mayor and City Council in January 2011 to work with management, outside consultants, and other stakeholders to review and recommend changes to the City of Phoenix Employee Retirement System (COPERS).

The current defined benefit plan obligation is equal to the City of Phoenix employee putting $1 for his retirement while the taxpayer is responsible for $4.  Some small amount is deducted from City of Phoenix employee’s pay-check and put into an account; at this time the City does not contribute any money however the City’s liability went up.  Once the employee is ready to retire, the retiree will receive $1 from the saving account, however the tax payers (City of Phoenix) are now on the hook for the remainder $4.

What happen if the City cannot meet its obligation? What happen if the City has no money?  This is happening all over the world today (Greece, Iceland, Ireland, Italy, Spain), even here in the United States. 

When the City cannot meet its obligations everybody loses.  City of Phoenix believes it can always meet its responsibilities thru taxation; however the City fails to recognize that when taxes go up, people and businesses leave and the City’s revenue goes down.

At that point what happens to the people counting on pension from the City of Phoenix?  What happens to the other liabilities that the City of Phoenix has to its citizens?

Additionally, the City is passing this tax-burden on to our children which is IMORRAL and WRONG.

The City of Phoenix Pension Reform Task Force utterly failed to understand this, and hence nothing will change until the City reach a crisis similar to what we see in Detroit and in some Cities in California.

The solution is simple and yet the City of Phoenix refuses to recognize the problem and its solution.

Privatize all pension plans; have the City contribute to its employees’ pension plan at the same time as the employee contributes.