Number crunchers hired by the Memphis City Council told the group Tuesday that the city’s pension fund is in better shape than a report last year from actuaries hired by Memphis Mayor A C Wharton.
Officials from the Segal Co. told council members the pension fund is underfunded by $467 million. ProcewaterhouseCoopers [PWC] said last year that the fund had a hole of about $709 million. Actuaries hired by the Memphis Firefighters Association put the figure at about $300 million.
The city council hired Segal earlier this year to get what they hoped would be a more-accurate picture of the pension problem. Segal used a couple of different assumptions about the status of the plan than did the other actuaries. For example, PWC estimated those in the Memphis pension system would live until age 79. The figure was based on average life spans in the Mid-South. Segal put that estimate at age 76.
Segal officials said they will soon present their findings to PWC.
But the new numbers will likely change the budget conversation that began with the council’s first budget hearings last week.
Paying down the pension gap was a major driver in the budget proposed by Wharton last month. He wanted to pay an additional $15 million to the fund this year, for a total of $35 million. Some council members wanted to raise that payment to $60 million.
Cuts to the budget were proposed by Wharton and council members to make those higher payments.
