CITY HALL— IT APPEARS THAT Tulsa’s Mayor, Dewey Bartlett, is not convinced he will win another term in office. Perhaps this is why he is seemingly comfortable making very unpopular decisions like establishing a "slash-and-burn" committee to transform the City’s plan for em-ployee pensions into a plan for gen-erating profit for private financial companies.
According to the Mayor, the rea-son he is working to shift the City’s traditional defined benefit (DB) plan to a 401K style plan is about saving tax-payer money. In reality, however, the Mayor’s plan is same style that has destroyed retirement funds—and profited the financial sector—across the United States.
Independent research provided to the union explains how the existing traditional DB plan works:
"Like nearly all public employers in the United States, the City of Tulsa ("the City") offers a traditional de-fined benefit (DB) plan. The Plan covers 2,387 active members, and provides benefits to 1,595 retirees and beneficiaries. Benefits are deter-mined under a formula using final average salary (FAS) and years of service. Under the Tulsa Plan’s for-mula, a 20-year City employee would replace 47 percent of his or her final average salary. Benefits for a hypothetical employee would be calculated in the following manner: $40,000 FAS x 20 yrs of service x .0235 = $23,500.
A plan participant whose years of service and age combine to equal or exceed 80 may retire without a re-duction in benefits."
A closer look at the City’s actual budget shows that the traditional DB pension plan currently enjoyed by Tulsa’s employees is a solid plan. The independent report provided to the union also noted that, "As of January 1, 2011 the Plan held pension assets with an actuarial value of $372 mil-lion and had an accrued actuarial liability of $485 million, see FY 2011 Comprehensive Annual Financial Report, page 39".
To help Bartlett gut the pension plan, he has recruited what is being described in the media as "The Mayor’s Retirement Destruction Committee" comprised of several characters that are known for their successful efforts to divert public money into the private pockets of big business.
One might ask: Why would the Mayor want to change it’s employees’ retirement plan if it is in fact "fiscally healthy"? One plausible reason indi-cated by similar moves across the country is because a healthy plan holds real assets of value. The Mayor and his committee (representing pri-vate—not public—interests) appear to want to carve it up for themselves and their business partners. A 401K, on the other hand, replaces the ac-tual assets and value of the DB plan with hollow prom-ises of more money sometime in the future with the added gamble that employees may wind up with nothing at all, while the exist-ing retirement fund exceeds $372 mil-lion in actuary value.