Earlier this year, some Chattanooga city council members were surprised to learn that two of their colleagues, along with another city worker, were using a loophole to contribute to the city’s pension plan using pension checks they were already receiving from another plan they had from previous jobs.
If it sounds convoluted, that’s because it is. Regardless, the council voted Tuesday to ban the practice—for everyone but the two council members and the city worker. The Times Free-Press reports:
The Chattanooga City Council voted Tuesday to keep future retirees who are re-employed by the city from dipping into their current retirement while contributing to a new city pension.
But first council members gave an exemption to two of their colleagues and one other city employee.
The ordinance was drafted after the General Pension Board discovered Councilmen Moses Freeman and Yusuf Hakeem were drawing checks from their city pension, contributing to a new pension plan and making a salary that totaled close to $100,000. Another city employee in the Economic and Community Development Department, Countess Jenkins, was also drawing nearly $40,000 from her pension and paycheck.
After months of studying the discrepancy, the board voted that any future retirees re-employed by the city won’t be eligible to contribute to a new pension and draw their current pension.
But Hakeem, Freeman and Jenkins were allowed to keep drawing their pension and told to decide if they wanted to make the mandatory contributions of a new hired employee —2 percent of their salaries — toward a new pension plan. Or they could opt out of the plan and receive a refund for any contributions already paid.
The council voted yesterday 7-0 to pass the ban, along with the exemption for the three city workers. The council members who were exploiting the loophole did not participate in the vote.
One of the councilmen in question, Moses Freeman, had this to say about the vote:
“That was not the time to say you couldn’t [draw from your pension]. The way you do it is what they did now, it’s for anyone in the future,” Freeman said. “It’s fair and it’s appropriate. It’s moral. It’s legal and it’s ethical.”
Photo by Brent Moore