'We're a forgotten group.' City of Savannah retirees call for updates to pension plan

This is a commentary by Tommy Barton, former editorial page editor of the Savannah Morning News. 

Retired City of Savannah firefighter Frank Mosely took care of the city for 24 years before he retired in 2011 at 57, two years beyond the normal retirement age for uniformed police officers and firefighters.

He’s calling for the city to take better care of him and other aging retirees.

Mosely, who contributed 6% of his pay toward his pension, said he started out riding on the back of the firetruck then worked his way up to battalion chief. He and his crews extinguished countless fires and handled dangerous and grim chores, like doing search and rescue after the 2008 Savannah Sugar Refinery explosion that killed 14 people, including one man who died when intense heat melted the metal tank around him and enveloped his body. It took several days to find him, Mobley said.

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Mosely now says retired public safety workers need rescuing. He said their pensions aren’t keeping up with 8% inflation and the skyrocketing cost of living. He said that the most that he and most other city retirees like him can hope for is a paltry 1% bump.

The city shouldn’t make promises it can’t afford to keep. Still, helping its retired public servants live out the remaining years of their lives in dignity and comfort is the humane and honorable thing to do. After all, pension plans were created to help retirees such as Mosely during their time of need, not to amass great fortunes that look good on paper and make officials feel better.

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“Retirees are being eaten alive by inflation,” Mosely said. “Our pension plan hasn’t been updated in 20 years. It’s outdated. But the word ‘pension’ never comes out of the mouths of anyone on City Council. We’re a forgotten group.”

Pension plan in 'solid shape'

The city’s pension plan appears to be in solid shape, according to the latest information about the plan, dated Jan.1, 2021, on the city’s website.

The unfunded actuarial accrued liability was listed at $98.9 million, down $2.8 million from the previous year. The actuarial value of assets was listed as $426 million.

The city’s retirement plan is a defined benefits plan based on a percentage of an employee’s final salary and years of service. It is administered by an eight-member board that gets scant public attention. Listed as the only elected official on the board is Alderman Nick Palumbo.

Pension plans are said to be the most unfunded liability in the nation.  When the estimated cost of future benefits exceed the amount of assets set aside to pay those benefits, big trouble is looming.

For example, in Chicago, the city owes a whopping $32.9 billion to its public employee pension plans. Pension reform is unpopular among government workers who dominate politics.

Fortunately, Savannah is not in the same sinking boat as Chicago. But that doesn’t mean things can’t be improved. A good pension plan also helps with employee recruitment and retention.

Running a pension plan is like trying to change a flat tire on a moving car. Unknown factors include stock market fluctuations, retirement dates, and when retirees die.

Indeed, experts have said different accounting methods can paint inaccurate pictures.

And everything is not all rosy here. The city’s paid expert, Segal Actuarial Consulting, noted that, “This is a mature plan, and thus it is expected that the contributions paid into the Plan each year will not be sufficient to pay all of the annual benefit requirements and expenses.”

Anthony Randazzo, executive director of the Equable Institute, a respected trade group, has cited “a lack of clarity, a lack of legislative oversight, and a lack of taxpayer interest” on the “very complex subject” of pensions as a growing public concern.

He calls for all state and local governments to bring people together to craft pension plans that are sound and fair.

Review and adjust

After 20 years, Savannah’s pension plan would seem to be overdue for a closer look. Mosley said he and other retirees plan to petition City Council to do just that.

More than a year ago, Mosley sent City Manager Jay Melder a letter expressing his concerns about the puny cost-of-living increases. Melder responded in a letter dated Oct. 12, 2021, concluding that changes would have a “significant impact.”

Mosely is skeptical. He cites research done in 2021 by Aulmon Giles, a retired city cop of 42 years and former Fraternal Order of Police president, who said that a 5% across-the-board pension hike would cost an affordable $6 million. Giles died in 2022.

“The city’s retirement plan is currently on sound financial footing and provides a robust benefit, all without being a financial burden on the city’s taxpayers,” Melder wrote Mosely. He called the city’s plan “one of the most generous in the state and region.”

Mosley isn’t buying it. “The last city officials who showed an interest reviewing pension benefits were Mayor Floyd Adams and Aldermen David Jones and Dana Braun,” he said.

That was a long time ago. It’s past time for a pension review that puts retirees and taxpayers at ease and fits with the times.

Contact Barton via email at tommy@iamnotoldnews.com.

This article originally appeared on Savannah Morning News: Savannah's pension plan for city workers is outdated, hurt by inflation