Philadelphia Republican Party
Contact: Joe DeFelice
City Republican Party Urges Action on Looming Pension Crisis
Philadelphia, PA – The Republican City Committee welcomed the recent proposal from City Controller Alan Butkovitz on pension buyouts for city employees, but today warned that we need to take bold action to address our looming pension crisis. For the 31,000 city workers in Plan 67, which is $5 billion short of its $11 billion funding liability, a pension buyout would likely be more favorable than bankruptcy negotiations. Our city is headed the way of Detroit if radical changes are not implemented.
Retroactive buyouts do not do enough to increase the solvency of our pension plan for today’s workers. “This is a Band-Aid,” said Joseph DeFelice, Chairman of the Philadelphia Republican Committee. “We have done nothing on the front end to stop the bleeding.”
To ensure that today’s workers are not bilked in the future, the city should shift more employees into hybrid retirement contribution plans, similar to those found in the private sector. The city Republican Party also suggests higher salaries in exchange for fewer benefits down the road, an attractive offer to our finest young graduates, who face unprecedented student debt and a mounting cost of living. These changes would make city jobs more competitive and in line with today’s flexible work culture, and decrease the amount of complacent patronage workers who are simply biding their time for their retirement options to vest.
City Council needs to repeal Mayor Kenney’s disastrous pension-bonus mandate, which he sponsored as a Councilman in 2007 and which last year removed an additional $7.7 million from our catastrophically-underfunded pension fund. In addition, we need to lower our fund’s growth projections from an unrealistic 7.75%, a bold-faced lie that deceives hard-working Philadelphians as to the scope of the fiscal crisis we face. Our city deserves new leadership on our pensions; it is time to fire Finance Director Rob Dubow, who quietly oversaw the bonus payouts last year, as well as the asset managers who charge exorbitant fees on the backs of our working families even as our fund underperforms those of other major cities. The city should invest more in passive index funds instead of doling out paychecks to unproven asset managers.
The Philadelphia Republican Party is committed to restoring fiscal sanity and avoiding the looming pension crisis imposed on our city from decades of inept one-party rule.
Philadelphia Republican City Committee – 215-561-0650 – 3525 Cottman Ave. Phila., PA 19149 www.phillygop.com