So now it’s a crisis.
The Buckeye Institute (HT to an email from Chris Littleton) has the details:
Cincinnati’s current public employee retirement plan, the Cincinnati Retirement System (CRS), is a traditional “defined benefit” (DB) pension plan that is far less fiscally sound than commonly understood. By some accounting standards, CRS is optimistically underfunded by $862 million. But a more accurate measure, the “fair market valuation” preferred by most economists, reveals unfunded liabilities of over $2.5 billion and a funding ratio of only 35%. As a result of this shortfall, pension costs for the City are extremely high. Total pension costs for 2014 are projected to equal 58% of total employee payroll, with the City bearing a cost equal to almost 49% of payroll. By comparison, the median total state or local government pension contribution is equal to 13% of employee payroll.
That $2.5 billion is roughly $8,400 for each of Cincinnati’s 296,000 residents.
Chris’s email points out to a related November ballot issue:
A Yes vote on Issue 4 this November, the charter amendment to fix Cincinnati’s pension problem, is extremely popular with voters and absolutely vital to Cincinnati’s future. Win-win from every direction!
This is going to require more research, because attempts at finding information about the issue on the web were futile.