The City of Memphis announced today that commissioned police officers, firefighters, and dispatchers will have the option to return to the 1978 pension plan. Approximately 1,000 employees will be eligible and this change will be effective July 1, 2023, pending Memphis City Council approval.
“Over the last almost seven years, we have continually improved the pay and benefits for firefighters and police officers to better recruit and retain them. Now more than ever, these efforts are essential in maintaining our public safety workforce, and this investment will help us,” said Mayor Jim Strickland. “With today’s change, the 2019 public safety referendum will allow us to offer the 1978 pension as an option for all of these essential employees.”
All employees hired before July 1, 2016, participate in the 1978 pension plan. Today’s change, subject to city council approval, allows the 1978 defined benefit plan as an option for all employees hired since July 1, 2016.
The 1978 Pension Plan allows public safety employees to contribute 8% of their salary, and the City makes a matching contribution of no less than 6% of the employee’s salary. Upon retirement, employees will receive a monthly benefit, which is a percentage of their highest 3-year average.
From an actuarial perspective, future costs depend heavily on asset return and participant selection. We will have more details on expenses when the mayor presents his budget in April 2023.
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Speech from Mayor Jim Strickland, September 28:
Thank you for joining us.
Since I have been mayor, we have worked hard to recruit and retain police officers and firefighters. We improved the pay, benefits and promotional process.
We’ve implemented retention bonuses and referral bonuses. We’ve stepped up recruiting efforts in Memphis and elsewhere and advocated for state government to waive any residency requirements.
Bottom line, each year we have worked to improve conditions so more public safety employees choose to work for the city of Memphis.
At the same time, in 2019, the public safety employee associations campaigned to increase the sales tax in Memphis to help retain and recruit firefighters and police officers, with the number one priority being to restore health insurance for fire and police retirees. The voters agreed.
Since then, we have worked closely with the associations and implemented the intent of the referendum. The health coverage has been restored and over 80% of firefighters and police officers have agreed to stay for 2-5 years in return for a retention bonus of 9% of their salary per year.
Thank you to the associations for this partnership.
Which brings us to today.
The associations and numerous firefighters and officers have told me that they would like our newest public safety employees to be able to participate in the 1978 pension plan instead of the 2016 plan.
And our experience with the sales tax referendum over the last 2 years shows that we can afford to make that available.
As a result, I am happy to say that we have agreed with the associations to provide those firefighters and police officers who currently do not qualify for the 1978 pension plan — those hired since July 1, 2016 and all future hires — to have the option to choose the 1978 or the 2016 pension plans beginning July 1, 2023, subject to city council approval. Currently, there are about 1,000 firefighters, police officers and dispatchers who would qualify.
Although we do not have an exact cost yet, our financial analysts tell us that this plan is affordable under the public safety sales tax referendum. We will finalize the cost and include this with our budget that we will present to the city council in April 2023.
This will be another significant financial benefit for Memphis police officers and firefighters, and we all agree that it will help our efforts to recruit and retain.
Thank you to both employee associations for their continued partnership to make these benefit improvements possible. Also, we are not done; we will continue to work together to improve the pay, benefits and working conditions so we can grow both departments.