CINCINNATI — Cincinnati's pension system continues to fall behind, and the impact on the city's budget could be “catastrophic,” the newspaper reported. Cincinnati Futures Commission Report.
“The economic downturn and consistent reductions in the city's workforce over the years have placed significant stress on the pension system's financial position,” the report states.
In 1999, there was approximately one city employee for every retiree. The result is a system that is 161% funded.
Today, there are about 400 fewer employees compared to the same 4,300 retirements, the report said.
As a result, the percentage covered by pensions was 65%, significantly lower than the 81% in Ohio's state system. Cincinnati is unique in that it is the only city with locally administered pension plans.
That fact “certainly rings alarm bells among the Futures Commission and should ring alarm bells throughout the city,” attorney Steve Goodin said.
The former city council member represents the city. 2015 Joint Settlement Agreement.
Tim Spence, CEO of Fifth Third Bank and Vice Chairman of the Cincinnati Futures Commission, said, “The Commission is committed to prioritizing the complete transfer of the city system to the state pension system.'' I believe the time has come for the city to resolve the pension issue once and for all.” He had a call with reporters last week.
Goodin said a transfer to the states would be a tall order, adding: “We would have to come up with a very large amount of money to make it happen at the state level before the states would be interested.” ” he said.
The report estimates that a lump sum of at least $390 million would be needed to bring Cincinnati's pension plan funding levels in line with those of the Ohio Public Employees' Retirement System (OPERS).
To generate this funding, the commission recommends regionalizing the Greater Cincinnati Water Utility to assist with pension transfers.
The sale could net a profit of more than $680 million, according to the report, but experts told WCPO they believe that number could be lower. There is.
Similar to the 2023 Cincinnati Railroad sale, it would require voter approval. The report says the process could take more than two years.
“Municipal water is a nationally recognized asset and can provide significant economic benefits to the region and the city,” Spence said.
The report states that if the city does not address pension issues, it could have a “devastating impact on the city's operating budget, forcing the city to cut services and increase taxes.”
“Step up by 1.5% per year” [proposed by the Cincinnati Retirement System’s Board of Trustees] From FY25 to FY45, General Fund contributions of 48% of payroll, or an average of $60 million per year, will be required. ”
David Niven, a political science professor at the University of Cincinnati, said after the recent railroad sale, convincing voters to sell additional assets could be difficult. There is certainly a danger that we start to conclude that City. “
The Cincinnati Futures Commission was established in early 2023 by Cincinnati Mayor Aftab Purewal and is comprised of local business leaders. The group released a 77-page report last week examining and proposing potential solutions to Cincinnati's budget deficit.
“Many of the individual items will require scrutiny, public engagement and perspective on our vision of equitable growth,” Pureval said in a statement last week.
