BIRMINGHAM, AL (WBRC) - Thirty years of work and no retirement check? That’s the word from Birmingham’s Mayor who says if the city doesn’t do something now, those who retire later will be without a pension.
But a longtime trustee over the pension board feels the mayor should be more transparent about the actual percentage of the pension fund.
In a video Wednesday, Mayor Randall Woodfin says right now there's not enough money going into the city's employee pension fund. We're told the city needs to make up $378 million over the next 30 years to prevent it from running out of money.
"This is a big problem. It didn't develop overnight but grew over the years. And it will take many years and a long-term commitment to make things better,” Woodfin said.
The city says in 2001, the pension fund was fully funded. By 2003, Woodfin says the city didn't keep up with the contributions necessary to meet the needs of increased benefits. We're told the financial crisis in 2008 created an even greater decline in the value of the fund.
"I find it very interesting and alarming that you would want to get everyone in a panic as if the system is about to run out of money and it’s not,” Dexter Cunningham, a retired BPD Sgt. and former trustee of the city’s supplemental pension board said.
Cunningham feels the mayor is painting a false picture of the situation. In the video, the mayor didn’t talk about the current percentage of the pension fund. The city tells WBRC it’s at 72.95%. The preferred rate is 80%. Cunningham believes the pension fund isn’t in dire straits.
If you are a current retiree, you are not impacted. If nothing is done, the city says its credit rating will drop even more then that could create a greater challenge of fully funding pensions. It could result in city jobs getting cut.