Baltimore is considering an ambitious new plan to stave off bankruptcy by cutting off most new municipal employees from the city’s pension plan. Under Mayor Stephanie Rawlings-Blake’s proposal, new police would be switched to a hybrid defined-benefit/defined-contribution pension plan, while new civilian employees would get no pensions at all. And while veteran workers would escape the brunt of changes, they would not get off scot-free, as the AP reports:
Rawlings-Blake also proposed forcing current city employees to contribute to their pension plans for the first time. The contributions would be offset by pay increases but would still save the city money.“We must shift to a 401(k)-style retirement plan for all new civilian hires,” Rawlings-Blake said. “The private sector has adjusted to this model. It’s time for Baltimore to change.”
In yet another city, the bill has come due on the boomer generation’s unrealistic pension promises, and younger and newly minted workers are getting stuck with paying most of it.