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Birmingham mayor warns $400 retiree increase would require $18.1 million up front, could strain city budget
Summary
Mayor Randall L. Whitman told the City Council that a board recommendation to give all retirees a $400 monthly increase for one year would require an upfront payment of about $18.1 million and must be paid from the city operating budget because the pension lacks a surplus.
Mayor Randall L. Whitman told the Birmingham City Council on April 29 that a pension-board recommendation to increase retiree pay by $400 per month for 12 months would require the city to pay about $18.1 million up front and could not be funded from the pension because the fund has no surplus.
Whitman said the board's April vote was advisory and repeated his warning: "The Board's vote was a recommendation, only it was not binding. I want to repeat that." He added, "The actuary has confirmed that 100% of the cost of the increase would have to be paid upfront before the increase could be paid to the retirees."
The mayor told the council the pension plan currently covers about 3,700 retirees and that the one-time increase would cost roughly $18,100,000. He said the city's most recent annual contribution…
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