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No Changes To Phoenix Pension Plans — Yet
There will be no changes to the pension plan for City of Phoenix employees, at least not yet. After more than three hours of debate and testimony, the city council rejected recommendations from a subcommittee that attempted to deal with the practice of pension spiking.
Pension spiking allows Phoenix city employees to increase their pensions by including unused sick time, vacation and other allowances to determine their retirement pay.
The retirement of former City Manager David Cavazos triggered the controversy when it was learned that his annual pension would be close to $220,000.
That led to a call by several council members to eliminate the spiking practice. A council subcommittee recommended changes including no longer allowing the accumulation of vacation time to determine pensions. Louisa Pedraza was one of dozens of city employees who testified what the city pension means to her.
"Other people laughed at us because we weren’t making a lot of money, but stability and pensions, that’s what we we're here for. And now we are looking at changes, suggested changes or recommended changes. That’s not fair," Pedraza said.
Councilman Jim Waring said media reports pointed to those employees earning high salaries. He felt the subcommittee recommendations were not strong enough.
"The most egregious things that hit the paper aren’t even negotiated with the unions. They’re middle or upper management," Waring said.
Retired City Budget Director Cathy Gleason told the council, changes to the plan could not be made suddenly.
"You must phase it in. That is the only clear and legal thing to do. Employees have not gamed the system as some have claimed. They operated under the rules that were laid out for them," Gleason said.
Councilman Sal DiCiccio, who has been an outspoken critic of pension spiking, said the voting in favor of the motion made no sense, because city staff had not determined yet how much money the recommendations might actually save.
"The people who are going to vote on this don’t know anything on it. So essentially this is a proposal where no one has the numbers," DiCiccio said.
The motion and a substitute failed, meaning at this point there will be no changes. The issue will not go away though, council and union members both expect it to be part of contract negotiations that get under way in the next several weeks.