Voters Reject Phoenix Pension Overhaul

http://youtu.be/8GC0bEBzJ-g

The controversial Phoenix ballot measure Proposition 487, which would have transferred all the city’s non-public safety new hires into a 401(k)-style system, has been struck down by voters.

From Reuters:

In a big victory for city labor unions, voters rejected Prop. 487 by a margin of 56.5 percent to 43.5 percent, according to results posted online by the Maricopa County Recorder/Elections Office.

The measure proposed to end the city’s traditional defined-benefit pension plan for new workers, shifting them to a plan dominant in the private sector, with employees pay a far greater share of the cost. Existing workers could have kept their current pensions.

The initiative was one of this year’s biggest test cases pushed by pension-reform advocates, including Texas billionaire and former Enron executive John Arnold, who have argued that traditional pension plans are an increasingly unaffordable burden for cash-strapped state and local governments.

The measure, by the city council’s own admission, would have cut retirement benefits significantly for new hires.

The city’s non-public safety pension fund is 64.2 percent funded.