How Do You Define a Pension Benefit?

Knoxville Mayor Madeline Rogero presented her first budget at a luncheon Friday, a basic no-frills maintenance budget, given the recession and her campaign pledge not to raise taxes. The question now is whether the City Council agrees.

Rogero proposed a hybrid pension plan going forward, in which new employees would be under a plan with both a “defined benefit” traditional pension plan, or a “defined contribution” plan, similar to an IRA. Some Council members would prefer to go for the defined contribution plan, cutting the city’s risk and eliminates future liabilities.

Outside of some minor quibbles, that is likely to be the only question mark in City Council’s ratifying the mayor’s budget.

Correction: The proposed hybrid pension plan for city employees is not part of the budget; Mayor Rogero has recommended Council adopt it as a ballot referendum for this fall. It will be a separate vote.

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