FOR IMMEDIATE RELEASE: September 19, 2011
CONTACT: Daniel Scarpinato
Calls for moving to 401K, ending double-dipping
PHOENIX – Mayoral Candidate Wes Gullett unveiled a bold set of needed reforms to Phoenix’s public pension system today, including a call to begin transitioning city employees to a 401K-style retirement plan in line with the private sector.
The Gullett plan also eliminates egregious abuses like “double dipping” and so-called “pension spiking.”
Phoenix’s public pension system has become an unsustainable and growing burden on taxpayers. Taxpayers spend nearly $100 million a year to cover the unfunded liability of the employee pension program – a price tag that is growing.
Included in the Gullett plan is the elimination of a deferred compensation plan, commonly known as a second pension, which costs taxpayers $40 million a year – almost enough to cover the cost of repealing the city’s food tax. Gullett has called for the repeal of that tax.
Gullett pledged to make pension reform a top priority if elected, stressing that the reforms are necessary to save taxpayers from ever increasing unfunded liabilities and to ensure city employees have a sound retirement plan.
“Our leaders should be accountable to us – not to special interest groups,” Gullett said. “Our pension system is broken, unsustainable and filled with abuses. In order to protect taxpayers – and to live up to the promises we’ve made – we must have the courage to confront this issue.”
The Gullett plan is two-tiered, protecting the pension of current retirees, while making future changes that limit the unfunded liabilities taxpayers will otherwise have to pay for.
The reforms include:
- Beginning to transition the city from a defined benefit plan to a defined contribution 401K-style plan
- Raising the retirement age by two years
- Increasing employee contributions to be more in line with other cities
- Ending “pension spiking”
- Eliminating “double-dipping”
“None of these initiatives will be easy, but doing nothing is not an option,” Gullett said. “This plan forward will most definitely prompt the same scare-tactics and fear-mongering we always hear from those who would rather see our pension system go bankrupt. But I promise to have the courage as Mayor to fight for these reforms and make sure they happen. Taxpayers can’t afford the alternative.”
The Arizona Republic has reported heavily on the problems with the public pension system. The newspaper reported in an 8-part series last year: “Even as local governments and the state are slashing budgets, Arizonans are propping up public-pension systems that allow civil servants to retire in their 50s, receive annuities that can exceed $100,000 a year, and collect pensions while staying on the same job.”
A copy of the plan is available here.
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Doesnt Gulletts wife work for Gallagher and Kennedy the lobbyist firm that represents the City of Phx in those kind of issues? Arent they working to keep phx benefits the way they are?
Gullets firm First Strategic was the lobbying group to pass the tobacco tax to fund First Things First – the programs for the children that are going to fix all the ills of society through a sin tax.
I think there are a couple of high paid officials that took advantage of the pension spiking like Wes’s buddy Frank Fairbanks (St Marys buddies) when Frank retired and actually made more for not working than he did when he was kinda working.
The other grifter was the Chief of Police that was on First Strategics client list. I guess they did a great job for him because they cashed all the checks and he got what he wanted.
Cant resist this.
Gullets strategery – lets find something people are mad about – you know food tax, pension, no jobs, and then lets do a strategic plan that fixes it. 1) Jobs Plan – lets do a strategic study, then lets unleash small businesss, they have too many rules, then lets lower taxes and I’ll do all this and say that i am going to rate myself with a public scorecard so people know how hard I am working.
2) Expensive pensions – well, I will stop them, Im gonna require people to work harder and longer and then use their own money, not the taxpayers money to fund thier pensions. Those dang streets workers and garbage collectors are only drawing pensions of 20 to 30k a year and they worked for 25 years for the city, but lets use the front page examples like the police chief and the city manager because those checks are really big.
3) Food tax – thats easy, when im mayor, its gone. I dont need no council votes or public process or vote of the people, they dont know what they are doing. They sure didnt know what they were doing when they passed it in an election so why should i let those dodos have a say in it now? I’ll just cancel it because I will be Mayor. Ill change the rules if I have too.
Well, so long Wes Gullett.