Today, an bill was introduced in City Council that would radically change the structure of the pension benefit for city employees. Sponsored by Councilman Darrell Clark on behalf of the Nutter Administration, the proposal would replace the current system with a hybrid of a defined benefit plan and a 401(k). Any employee hired after July 1st would be enrolled in the new program.
City Finance Director Rob Dubow says the change could save $500 million over the next thirty years. That might be true, but I can't help but wonder at the timing of this proposal. In some ways, it reminds me of Nutter's call to eliminate DROP and cars for elected officials at the outset of the city budget process. How so? Let's count the ways.
First of all, it's a controversial proposal that's being made at a critical moment. Nutter tried to get Council to kill DROP and cars at the start of the budget process. Now, he is publicly signaling a desire to change the pension benefit for city workers just as contract talks are heating up. Like the cars and DROP proposal, it's likely to anger union leadership.
Another similarity is the lack of control that Nutter has over the issue. In order to get these changes, he'll need to convince the unions to go along. For uniformed workers, that'll have to happen during arbitration hearings. Non-uniformed workers will have to agree at the bargaining table. I can't imagine any of the unions going along with these changes and Nutter has no real incentive to make them go along.
Union leaders told the Daily News that they were given no advance warning about the proposed change. That sounds like the same blues sung by members of City Council, who were shocked to be called out during the Mayor's budget address.