Peduto's Early Retirement Plan for City Employees Moves Forward
Mayor-elect Bill Peduto saw his plan to offer early retirement to some city employees move forward in City Council Monday.
The plan would allow 136 city employees, whose age plus years of employment equals 70 years, to begin collection their pensions early. Currently that number has to equal 80. The employees must also be at least 50 years old and have no less than 8 years of service to the city.
Peduto says this is all part of his vision for a major shakeup at City Hall.
“We are making a big leap to a different form of government in this city, one we haven’t seen before,” Peduto said. “For those that have dedicated their lives, we’re allowing the opportunity to be able to have a soft landing out of this process.”
The bill allows for a pension enhancement of up to $2 million, but Peduto and volunteer consultant Kevin Acklin — a business and finance lawyer who unsuccessfully ran for Mayor in 2009 — said that’s a “worst case scenario.”
“I want to recognize this very early on: $2 million is not the number, and any discussion on $2 million is a false discussion,” Peduto said. “$2 million would mean that all 136 employees would take this, which we know is not going to be the case. It would be closer to 50 percent of that number.”
Peduto and Acklin both said the plan could have a “net zero” cost to the city, depending on how many employees take the offer. They said the city will save money by eliminating and combining some positions.
Questions about which positions would be affected were a major point of contention during the meeting.
“In terms of eliminating or combining positions, that goes to the positions that are left vacant by the employees who actually take this proposal,” Acklin said.
He admitted that he was asking council to take a “leap of faith” and that it was somewhat of a “chicken-and-egg situation.”
City Council President Darlene Harris wanted to be sure that the current pension fund would not be affected by the plan, and said she might ask to put an amendment in the bill stating that “no moneys can be taken from the pension fund.”
Councilman Ricky Burgess, who was not at the meeting but participated via speakerphone from Washington, D.C., said he had “serious concerns” about the proposal. He said he thought the city was prohibited from implementing any pension enhancements under Act 47, and reiterated his desire to see a matching investment in the Pittsburgh Summer Youth Employment Program.
Harris, Councilman Corey O’Connor, and Councilman Daniel Lavelle all abstained from voting on the bill, stating that they needed more information before making a decision. Still, the bill passed with unanimous support from the remaining council members, including Councilwoman Teresa Kail-Smith, who also expressed serious concerns.
“I don’t like it; I’ve said this before,” Kail-Smith said. “It just makes me very uncomfortable to know an employee can change every four years depending on election cycles and what happens. I think a lot of people are doing really good jobs that we’re going to lose, and we’re going to lose institutional knowledge as well.”
The bill will now pass on to the full council for final consideration.
If the bill passes, eligible employees will have until Jan. 31, 2014 to decide if they want to take early retirement.