City of Cincinnati Issue 4 (November 2013), Amendment Text

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:: Back to Cincinnati Pension Reform Charter Amendment Initiative, Issue 4 (November 2013)

Amendment text

An Amendment to the Charter of the City of Cincinnati to ensure a fair and sustainable retirement system while preserving essential city services and protecting residents from payment of excessive taxes.

Text: Be it resolved by the people of the City of Cincinnati that a new Article XVII of the Charter is hereby added as follows:

Section 1: The people find and declare that the heretofore model by which retirement benefits are or will be provided to current Cityemployees is not financially sustainable, and to protect Cincinnati residents and employees, must be adjusted immediately.

(A) Without adjustment, payment of financially unsustainable retirement benefits to City employees threatens essential City services and may result in tax, fee or rate increases.

(B) To afford the retirement benefits of past or current City employees, taxes and fees should not be raised, and vital City services should not be reduced or jeaparized.

(C) City employees are entitled to a sustainable City retirement system that presents an opportunity for pomised benefits to be paid.

(D) Retirement benefits for City employees must reflect the amount that City employees actually save for their retirement, plus a capped City contribution, rather than considerably more or less.

(E) Retirement benefits for City employees must be adjusted to protect the City's viability, public safety, and the household incomes and savings of Cincinnati families.

(F) Control over costs associated with City employee's retirement benefits is, for the City, a matter of inherent managerial policy. Containing these costs is necessary for the City to (1) control its overall budget; (2) maintain the efficiency and effectiveness of government operations; (3) determine the adequacy of the City workforce; and (4) carry out its mission as a governmental unit.

Section 2: Future retirement benefits for City employees must reflect the actual amounts saved by each and contributed for each by the City for retirement.

(A) The people of Cincinnati, by and through their government, shall not be compelled to contribute more funds to a City employee's retirement benefits than that City employee has contributed to his or her own retirement benefits.

(B) Those employed with the City at the time of the passage of this Amendment shall be free to choose between the retirement benefit system identified in Divisions (C) and (D) of this Section. Those hired after the passage of this Amendment shall not be eligible for the retirement benefit system in Division (D).

(C) Effective June 1, 2014, the aggregate retirement benefits paid to current and future City employees may not exceed the aggregate of (1) an employee's individual contributions toward his or her retirement benefits; (2) the City's contributions toward an employee's retirement; and (3) the return on an investment plan to which employee and employer contributions are made.

(i) The City must supply employees with an array of substantively distinct investment options.
(ii) A City employee's contributions to his or her investment plan vest immediately. The employee owns this sum and may assert ownership over it at any time.
(iii) The employee shall be entitled to all return on his or her investment.
(iv) The City shall not, directly or indirectly, annually contribute toward the employee's retirement fund an amount greater than nine percent of an employee's annual base compensation.
(v) Nothing in this Section shall limit the amount of his or her own compensation that a City employee can contribute toward his or her own retirement.

(D) Notwithstanding the requirements of Division (C), those employed with the City at the time of the passage of this Amendment may elect to collect a defined benefit upon retirement. This defined benefit shall not exceed an annual payment equal to an employee's years of service multiplied by two percent of the average of the employee's five highest years of base compensation. The amount of such payment shall not exceed 60 percent of the average of the employee's five highest years of base compensation. The multiplier applicable to years of service that begin after June 1, 2014 shall not exceed 1.5%.

(E) Nothing in this section shall be construed to reduce benefits accrued prior to the passage of this Amendment.

(F) No employee hired after the date of the Amendment shall maintain a property or contractual right to any retirement fund above and beyond those which he or she has contributed, along with the investment return earned by those funds. City Council and Voters maintain the right to reduce future benefits, as required by this Amendment or otherwise.

(G) No past or present City employee shall be entitled to collect retirement benefits while simultaneously earning income from the City of any other political subdivision or government agency or entity.

(H) The City may amortize pension debt over total payroll and shall not be limited to amortize over payroll remaining in the old system.

Section 3: Current retirees "Cost of Living Adjustments" must reflect no more than the actual rise, if any, in the cost of living.

(A) Cost of Living Adjustments shall be limited to the increase in the consumer price index (Cincinnati U.S Bureau of Labor Statistics), but at all times capped at a simple rate of 3.0 percent per fiscal year.

(B) The Cost of Living Adjustments articulated above shall be fully effective on January 1, 2014.

(C) The City may not raise taxes or reduce services to fund Cost of Living Adjustments. However, the City may temporarily suspend Cost of Living Adjustments when necessary.

(D) The City may not circumvent this Section by providing other benefits as substitute for reductions in the Cost of Living Adjustment.

Section 4: The City's retirement benefits plan must be annually audited, that audit must be disclosed to the public, and funds must be made available to pay projected future benefits.

(A) Any and all City retirement benefit systems must be audited by an independent auditor.

(B) The audit specified in Division (A) must supply complete and detailed data on the 10-year history of and 30-year projections for the pension fund's market value of assets, liabilities, unfunded liabilities, total outflows, total benefits paid, amortized payments under current policy, the expected date under which current benefits will be fully funded and/or unfunded, and 30-year projections for good, expected, and poor returns on investment. This audit must also provide individual level data to the maximum extend permitted by law.

(C) If any independent audit demonstrates that insufficient funds will be available to pay forecasted future obligations within ten years from the date of the audit's completion, the City must forthwith create sufficient cost savings or new revenue that, when accumulated over the time between the adverse audit and the projected shortfall, will meet those forecasted future obligations.

(D) The employment of any City employee or officer who attempts to influence the results of this audit shall be terminated immediately.

Section 5: This Amendment must be enforced to the maximum extent possible.

(A) This Amendment shall be implemented to the maximum extent that the constitutions of the United States and the State of Ohio permit. Any provisions found in conflict with either constitution shall be first construed as not conflicted with the state or federal constitution, and then, only if necessary, severed from remaining portions of the Amendment, which shall remain in effect.

(B) This Amendment shall prevail, to the maximum extent permitted by state and federal constitutions, over all other conflicting or inconsistent wage, pension, or post-employment benefit provisions in any otherwise-applicable Charter, ordinance, resolution, agreement, or other enactments.

(C) This Amendment does not apply to City employees enrolled in a state employee retirement system.

(D) Terms used in this Amendment should be given their ordinary meaning.

(E) Any Cincinnati resident, whether injured or not, shall have the right to bring a civil or equitable action to enforce this Amendment. In adjudicating whether this City has complied with this Amendment, the burden shall be upon the City to prove compliance. Upon prevailing in such an action, the resident shall be entitled to injunctive relief, reasonable attorney fees, costs, and any other relief that is just.