Cincinnati voters reject pension reformNews added by Benefits Pro on November 8, 2013

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By Dan Berman

Cincinnati voters, going against a rising tide of pension reform across the country, this week soundly rejected major changes to the city’s public retirement system, which is facing unfunded liabilities of $870 million.

Nearly four-fifths percent of voters (78 percent) said no to the initiative that won a spot on the ballot when the Cincinnati for Pension Reform Committee, a private group with ties to the Tea party, collected the required number of signatures on petitions.

The entire City Council and both candidates for mayor went on record against the measure, which would have mandated that the city eliminate the funding gap within a decade.

Under the ballot measure, those hired by the city in the future would be covered by a defined contributions plan, rather than the current defined benefits plan. Opponents argued that the measure would likely have triggered severe cuts in city services along with tax hikes.

Reforms approved by the City Council in 2011, did not stem the rise in unfunded liabilities, partly because promised contributions to the pension fund were never made. The pension plan provides benefits to more than 4,000 retirees. In addition, the city employs 2,900 workers that pay into the plan. The pension fund has $2.1 billion in assets.

States and cities from Rhode Island to California have pushed for pension reform in the wake of the recession and changes in the way the future assets of funds are calculated. Labor unions often say changes to negotiated retirement plans usurp their collective bargaining rights. In some places, like Michigan, state constitutions enshrine those rights.

The Cincinnati vote was seen as a victory by organized labor.

Peter McLinden, Cincinnati-area Regional Director at AFSCME Ohio Council 8, released this statement:

"Today's vote will be heard beyond Cincinnati and sends a message for those on the ideological extremes who think it is OK to impose their agenda on an entire city,” said Peter McLinden, Cincinnati-area Regional Director at AFSCME Ohio Council 8, in a statement. “... That said, we all are dedicated to working together moving forward to fix the pension system in a way that is in the best interest of Cincinnati public employees and taxpayers.”

The Cincinnati for Pension Reform Committee said it was unsure if it would try again to get the issue on the ballot, but that pension reform was needed to save benefits for future retirees.

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