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From YouTube: Committee on Labor and Civil Service 6-13-2018
Description
The Committee on Labor and Civil Service of the Council of the City of Philadelphia held a Public Hearing on Wednesday, June 13, 2018 to hear testimony on the following items:
180557 An Ordinance amending Title 22 of The Philadelphia Code, entitled "Public Employees Retirement Code," to expand "Plan 16" to include certain employees, to change contribution rates for certain employees and the City, to amend various provisions relating to the Deferred Retirement Option Plan ("DROP"), and to make technical amendments; all under certain terms and conditions.
180599 An Ordinance amending Title 22 of The Philadelphia Code, entitled "Public Employees Retirement Code," to provide for additional members of Plan 16, to change contribution rates and to specify the Stacked Hybrid Cap for certain employees, and to make technical amendments, all under certain terms and conditions.
Committee on Labor and Civil Service
Chair: Councilwoman Cherelle Parker (9th District)
Vice Chair: Councilman Brian O’Neill (10th District)
A
Good
afternoon,
this
is
a
hearing
that
is
being
called
to
order.
This
is
the
public
hearing
of
the
City
Council
Committee
on
labor
and
civil
service.
The
purpose
of
this
public
hearing
is
to
hear
testimony
on
both
build
numbers,
one
eight
zero,
five,
seven,
seven
and
one
eight
zero.
Five,
nine
nine
I
recognized
the
presence
of
a
quorum
of
committee
members.
Members
of
the
committee
and
attendance
are
to
my
left:
Councilwoman
Helen
gam,
councilman
alt,
album
burger
into
my
right,
councilman
Allen
da.
A
B
C
Councilman
Parker
members
of
the
committee,
I
am
Jackie
done.
Chief
of
staff
to
the
finance
director
with
me
is
Rob
du
Bois
finance
for
the
city
I'm
here
to
testify
in
support
of
bill
number
one:
eight
zero,
five,
five
seven,
which
will
implement
the
pension
reforms
included
in
recent
arbitration
Awards
with
the
Fraternal
Order
of
Police,
deputy
sheriff's
and
Register
of
Wills,
and
the
International
Association
of
firefighters.
The
arbitration
awards
for
the
FOP
and
the
IAF
EV
require
members
to
make
additional
contributions
to
the
pension
fund.
C
Most
current
employees
will
pay
an
additional
0.92%
in
FY
18
and
a
second
0.92
for
a
total
additional
contribution
of
1.8
4%
starting
in
FY
19.
New
hires
will
pay
an
additional
2.5
percent
above
the
contribution
rates
currently,
in
effect,
these
additional
contributions
will
increase
the
assets
to
the
pension
fund
over
time
for
deputy
sheriff's
and
register
of
Wales
employees.
Current
members
participate
in
the
tiered
contribution
structure
in
place
for
District
Council
33.
C
Under
this
tier
system,
members
with
higher
annual
salaries
will
pay
a
higher
contribution
rate
employees
with
higher
annual
salaries
with
any
all
sellers.
Excuse
me
from
forty
five
thousand
and
one
to
fifty-five
thousand,
would
contribute
an
additional
point.
Five
percent
at
the
top
tier
employees,
with
annual
salaries
exceeding
100
thousand,
would
pay
an
additional
three
percent.
These
additional
contributions
increase
the
assets
of
the
pension
fund
over
time.
The
award
also
requires
new
deputy
sheriff
and
Register
of
Wills
members
to
participate
in
plan
16
a
stacked,
hybrid
plan.
C
The
stacked
hired
plan
combines
a
traditional
defined
benefit
for
the
first
50,000
and
of
own
employees,
earnings
with
an
optional
401k,
with
an
employer
match
for
earnings.
Above
this
amount,
the
stacked
hybrid
plan
provides
retirement
security
for
city
employees,
while
also
reducing
the
pension
systems.
Liabilities.
The
deputy
sheriff
and
register
wills
award
also
removes
the
two-year
delay
requirement
to
enter
into
the
deferred
retirement
option,
program
or
drop.
That
was,
in
truth,
a
twas
included
in
legislation
enacted
in
2011,
but
maintains
the
lower
interest
rate
on
drop
accounts
established
in
that
ordinance.
C
Also,
these
arbitration
Awards
require
the
additional
employee
contributions
to
be
paid
on
top
of
the
city's
required
annual
contribution
to
the
pension
fund.
This
means
that
the
city
will
pay
more
than
what
is
legally
required
each
year
to
improve
the
finest
funding
status
of
the
plan
more
quickly
over
time.
The
reforms
in
these
three
will
help
improve
the
health
of
the
city's
pension
fund.
This
concludes
my
testimony
and
we
are
happy
to
answer
any
questions
you
have
thank.
A
You
for
your
testimony
any
questions
from
my
colleagues.
I
just
want
to
and
I'll
wait
until
after
we
actually
finish
with
bill
number
one:
eight,
zero,
five,
nine,
nine
and
just
briefly
state
to
you
miss
Dunn,
that
for
both
of
these
bills,
I
want
to
sincerely
commend
the
administration
along
with
labor.
Here,
representatives
of
our
municipal
employees,
along
with
our
council,
leadership
and
council
president
Clark
and
all
of
those
who
have
been
involved,
I
was
sharing
with
mr.
A
du
Bois
prior
to
this
hearing
that
I
did
not
know
of
any
major
municipality,
any
major
city
in
the
big
ten
who
had
achieved
this
magnitude
of
pension
reform
via
the
collective
bargaining
process.
I
mean
immediately
to
me,
Detroit
came
to
mind.
There
was
a
decrease
in
retirement
benefits,
but
they
were
for
existing
retirees,
but
that
was
done
and
receivership
through
the
courts.
A
But
you
have
done
this
through
the
collective
bargaining
process,
so
we
have
found
a
way
in
the
best
possible
manner
to
enhance
the
city's
fiscal
health
and
balance
that
with
the
retirement
security
of
our
municipal
workforce.
So
we
wanted
to
say
thank
you
for
that.
Councilwoman
game
did
I,
see
your
hand,
okay,.
A
A
Next,
one:
okay,
all
right:
let's
go
to
the
next
one,
and
let
me
also
for
the
record
clarify
this.
We
know
that
when
we
open
that
the
number
one
eight
zero,
five,
seven
seven
and
one
eight
zero
five,
nine
nine-
that
first
number
was
not
accurate.
The
bill
numbers
are
one
eight,
zero,
five,
five,
seven
and
one
eight
zero,
five,
nine
nine,
and
we
will
now
a
hear
testimony
on
bill
number
one:
eight:
zero:
five,
nine
nine
state,
your
name
for
the
record
good.
D
Afternoon,
councilman
Parker
members
of
the
labor
and
service
committee
and
Rob
DuBose,
his
finance
director
I'm
here
to
testify
in
support
of
bill
number
one
805
9,
which
would
enact
pension
reforms
for
employees
who
were
exempt
from
civil
service.
Employees
who
are
in
civil
service
but
not
represented
by
a
union
and
for
elected
officials
with
me,
is
Jackie
dam
chief
of
staff
in
the
office
of
Director
of
Finance.
There's
also
amendments
that
we've
presented
to
the
clerk
that
would
amend
the
bill
to
reflect
the
tentative
agreement
that
we've
reached
with
District
Council
47.
D
The
tentative
agreement
still
needs
ratification,
but
so
the
terms
would
now
apply
to
47
there's
no
more
important
challenge
facing
the
city
finances
and
it's
underfunded.
Pension
system,
the
general
funds
pension
costs
have
grown
to
over
400
by
over
400
million
dollars
since
FY
o
1,
rather
than
growing
stronger.
While
the
city
has
been
incurring
those
increased
costs.
The
system
has
seen
its
funding
percent
drop
by
almost
from
almost.
A
D
Percent
to
forty
five
percent.
Under
this
bill,
current
exempt
and
non-represented
employees,
current
elected
officials
will
participate
in
the
tiered
contribution
structure
so
and
that
tiered
contribution
structure
will
be
changed
to
reflect
agreement
reached
with
47,
and
the
new
tiered
contribution
structure
would
also
apply
to
47
and
33.
D
The
top
tier
employees,
annual
salaries
exceeding
hundred
thousand,
would
pay
an
additional
2.75
percent.
These
additional
contributions
increase
the
assets
of
the
pension
fund
over
time.
The
bill
would
also
require
new
employees
to
participate
in
plan
16
that
the
stacked
hybrid
plan
under
the
stacked
hybrid
plan,
as
proposed
in
this
legislation,
employees
would
have
combination
of
traditional
defined
benefit
plan
for
the
first
65,000
of
an
employee's
earnings
and
an
optional
401k
with
an
employee
match
for
earnings
above
this
amount.
D
The
bill
would
exempt
elective
newly
elected
officials
from
the
stacked
hybrid.
Instead,
newly
elected
officials
would
continue
to
participate
in
the
existing
pension
plan,
while
all
other
non
uniform
employees
would
participate
in
the
in
the
new
stacked
hybrid.
The
administration's
goal
is
for
all
new
employees
in
Musil
plan
to
have
the
same
pension
structure,
therefore
requesting
that
the
bill
be
amended
to
include
future
elected
officials
in
the
new
stacked
hybrid.
The
legislation
is
passed
by
City
Council,
more
than
eighty-five
percent
or
higher
more
than
90
percent
of
the
city's
workforce
of
participating
in
pension
reform.
D
Actually,
it's
more
than
99
percent
yeah
would
be
participating
in
pension
reform,
helping
improve
the
long-term
health
of
the
pension
fund
administration.
Looking
won't
continue
working
with
47
because
we
have
a
tentative
agreement.
That
concludes
my
testimony
and
we'd
be
happy
to
take
any
questions.
E
You,
madam
chair
mr.
dabao,
if
you
could
give
a
little
more
background
when
you
talk
about
how
these
reforms
will
help
improve
the
state's
pension
fund,
giving
perspective
and
reference
to
where
we
go
from
our
current
funding
level
to
future
funding
levels
based
on
this
legislation,
as
amended
yeah.
D
Our
current
funding
level
is,
we
were
under
46
percent,
funded
with
this
legislation
and
other
reforms,
including
dedicating
sales
tax.
Thank
you,
gentlemen,
to
to
pensions,
making
sure
the
additional
contributions
are
above
mm.
Oh
all
those
things
together,
I
mean
it
will
get
to
80%
funded
by
2030.
E
E
E
D
I
mean
the
other
components
of
what
we're
doing
are
the
sales
tax
revenue,
which
is
coming
in
a
little
stronger,
so
I
think
that's
almost
300
million
dollars
over
a
five-year
plan
so
that
that's
a
really
huge
help
for
it
for
the
fund.
It's
making
sure
that
these
additional
contributions
are
over.
What's
in
the
plan,
it's
lowering
our
cost
of
investment.
We've
changed
the
way
we
invest
at
the
pension
fund.
We've
gone
towards
more
indexing.
We've
gotten
rid
of
all
our
hedge
funds,
I
think
that's
reduced
our
costs
by
over
13
million
dollars
a
year.
D
E
D
E
A
You
councilman
green
mr.
du
Bois.
Can
you
just
for
the
record.
You
mentioned
sales
tax
revenue
in
addition
to
that,
you
talked
about
our
pension
fund
sort
of
just
being
46
percent
46
percent,
and
when
we
talk
about
that,
unfunded
liability
explain
to
the
public
what
you
meant
when
you
talked
about
sales
tax
revenue
and
give
them
the
number.
That
is
our
total
unfunded
liability
right
now.
So.
D
We
are
able
to
take
a
portion
of
sales
tax
money
and
dedicate
it
towards
the
pension
fund,
and
that
has
added
substantial
assets
of
the
fund
and
will
continue
to
as
I
said
about
I,
think
about
300
million
over
or
a
five-year
plan,
and
we've
also
treated
that
as
being
above
the
MMO
as
opposed
to
replacing
the
contributions
we
already
make.
So
it
just
straight
help
to
their
pension
funds.
Health.
When.
A
You
mentioned
the
6
point:
1
billion
dollars
of
unfunded
liability
is
that
number
of
what
would
I
be
accurate
if
I
said
that
approximately
5.1
billion
of
that
is
attributed
to
plan
67
that
we
often
refer
to
as
legacy
costs,
or
would
it
be
a
little
less
than
five
point
one?
Maybe
five
billion
I
think.
D
F
You,
madam
chair,
thank
you,
finance,
director
to
bow
and
Thank
You
Jackie
for
your
testimony.
I
said
a
couple
of
questions.
I
want
to
make
sure
understood.
It
sounds
like
our
liabilities
about
eleven
billion
four
hundred
million.
Roughly
something
in
that
range.
That's
something
did
the
math
in
the
universe
the
6.1
billion
represents
54%,
that's
not
funded
was
46%
is
funded.
Yes,.
F
D
F
Don't
know
if
it's
always
we're
in
2018
you're,
saying
2030,
so
it's
thirteen
years
from
now
we're
gonna
catch
up
three
and
a
half
billion
on
the
pension.
Yes,
that's
a
great
catch
up.
If
we
can
do
it,
okay,
it
just
seems
like
a
big
catch
up
and
isn't
this
still
now
considered
the
number
one
issue.
Sorry.
D
There's
one
other
thing
that
I
haven't
said
about
what
we're
doing:
we've
also
been
lowering
our
earnings
assumption
every
year
and
we
lower
our
knees
assumption
it
means
that
our
contribution
goes
up.
So
one
of
the
other
big
elements
of
this
plan
is
increasing
our
contribution
each
year
by
making
our
knees
assumption
were
conservative
and.
F
F
E
D
D
E
And
then
also
the
falkland
counseling
downs
point
about
13
year
timeline
to
get
fully
funded.
That's
also
incumbent
upon
that
the
market
rate
of
return
staying
at
a
healthy
rate
over
that
period
of
time
and
I
mean
one
of
the
concerns
that
we're
doing
all
the
weekend.
But
we
don't
know
what
the
market
will
bear
and
considering
that
we've
had
a
very
long,
long
bull
market.
This
possibility
that
we
could
be
on
the
horizon
of
a
recession
or
some
type
of
bear
market
in
a
year
two
years,
three
years.
D
F
You
ma'am
chair,
just
I,
forgot
to
ask
you
another
question:
you're,
expecting
that,
though,
in
the
last
two
years
we've
had
a
pretty
good
market
as
far
as
investments
are
concerned,
I
know
the
pension
funds
done
pretty
well.
How
much
of
a
dent
have
we
made
in
this
really
good
market?
In
the
last
two
years
there.
D
Are
two
things
that
we've
done?
One
is
the
funding
percent
has
gone
up.
The
other
thing
is
there's
kind
of
a
collar
around
which
your
assets
we
step
back.
We
look
at
actuarial
value
of
assets
rather
than
market
value,
and
the
actuarial
assets
have
to
be
within
a
collar
of
market
value,
so
you
can
be
within
80
and
120
percent.
We
were
below
the
hundred
percent,
so
we've
caught
up
in
that
collar
and
we've
increased
our
fund.
Eighty
percent,
so.
A
Thank
you.
Mr.
Deveaux
I
want
to
follow
up
on
councilman
Greene's
comments
relative
to
preparation
if,
in
fact,
another
recession
comes,
and
so
while
we
are
not
expecting
you
to
be
magicians
and
project
when
a
Black
Swan
effect
is
coming,
I
want
you
to
for
the
benefit
of
retirees
who
may
be
watching
now
to
share
with
them
the
reprieve
that
you
received
from
Harrisburg
relative
to
the
city's
minimum
municipal
obligation
when
we
were
in
the
midst
of
a
crisis.
What
is
that
process
and
how
was
the
city
assistant
and
did
Harrisburg
help
you
so.
D
State
law
has
something
called
the
minimum
minimum
municipal
obligation
and
we're
required
to
pay
that
each
year.
What
the
state
did
during
the
fiscal
crisis
is
say
that
for
two
years
we
could
pay
below
that
it's
called
the
MMO
below
the
MMO.
So
long
as
we
made
up
the
amount
that
we
didn't
pay
with
interest
within
gave
us
a
set
amount
of
time
and
we
actually
paid
it
back
early.
So
that
was
the
kind
of
relief
that
we
got
so.
D
The
other
thing
that
the
pension
board
has
done
is
try
to
look
at
the
asset
allocation
to
make
sure
that
there
are
some
protections
against
down
markets.
The
goal
is
to
participate
as
much
as
you
can
in
the
up
market,
while
not
getting
hurt
in
the
down
market.
So
that's
what
we
try
to
look
at
great.
A
Final
thing
and
I
notice:
it's
not
we
we
heard
from
them
specifically
during
our
budget
hearings
and
I.
Just
wanted
you
to
note
for
the
record,
since
the
issue
of
performance
was
was
brought
up.
I
just
want
you
to
note
for
the
record,
because
you
may
remember
my
mind
is
a
little
cloudy
right
now,
but
for
some
odd
reason,
I
remember
reading
an
article
and
I
said:
I
couldn't
believe
they
printed
this
that
the
city's
fund
actually
performed
better
than
some
of
the
other
surrounding
counties
and
I
said
wow.
That
was,
you
know.
D
D
A
You
are
there
any
other
questions
from
our
colleagues.
Is
there
anyone
else
here
who
wishes
to
testify
on
this
bill?
This
will
conclude
the
public
hearing
and
we
will
now
go
into
the
public
meeting
to
consider
the
action
to
be
taken
on
these
bills.
Today
we
are
now
in
the
public
meeting
and
the
chair
recognizes
councilmember
taubenberger
for
an
amendment
to
build
number
one:
eight,
zero,
five,
five,
seven
thank.
A
A
B
B
A
Not
the
councilman
is
there
a
second:
it's
been
moved
and
properly
seconded
that
the
amendment
to
build
number
one,
eight,
zero,
five,
nine
nine
be
approved.
All
those
in
favor
of
the
motion
will
signify
by
saying
aye
all
right.
Those
opposed
the
eyes
have
it
in
to
motion
carries
and
the
amendment
to
bill
number
one:
eight,
zero,
five,
nine
nine
has
been
approved.
The
chair
now
recognizes
councilmember
talbin
burger
for
a
single
motion
on
bill
number,
one:
eight,
zero,
five,
five,
seven
as
amended
and
bill
number
one:
eight,
zero,
five,
nine
nine,
as
amended.
Thank.
B
You,
madam
chair
I,
move
that
bill
number
one:
eight
zero,
five,
five
seven
as
amended,
and
bill
number
one:
eight:
zero:
five:
nine
nine,
as
amended,
reported
from
this
committee
with
a
favorable
recommendation
and
further
move
that
the
rules
of
counsel
be
suspended
to
permit
first
reading
of
these
bills.
At
the
next
session
of
counsel,.
A
It's
been
moved
and
properly
seconded
that
bill
number
one:
eight,
zero,
five,
five,
seven
as
amended,
and
build
number
one:
eight
zero.
Five.
Nine
nine,
as
amended,
be
reported
from
this
committee
with
a
favorable
recommendation
and
further
move
that
the
rules
of
counsel
be
suspended
to
permit
first
reading
of
these
bills
at
the
next
session
of
council.
All
those
in
favor
of
the
motion
will
signify
by
saying
aye
all.
E
B
A
Opposed
the
eyes
have
it
into
motion,
carries
bill
number
one:
eight,
zero,
five,
five,
seven
as
amended,
and
bill
number
one:
eight,
zero.
Five,
nine
nine,
as
amended,
will
be
reported
from
this
committee
with
a
favorable
recommendation,
with
a
request
that
the
rules
of
council
be
suspended
to
permit
first
reading
at
the
next
session
of
council.
This
concludes
the
business
of
the
Committee
on
the
committee
of
labor
and
civil
service
for
today.
Thank
you
all
very
much
for
your
attendance
and
congratulations.