Birmingham pension board meets to solve $378 million deficit

BIRMINGHAM, Ala. — The board which manages Birmingham's pensions met Wednesday to discuss options to shore up a $378 million deficit. No conclusion was reached but multiple options were discussed.

The city says the deficit must be shored up over the next 30 years to prevent the pension funds from running out of money. The City of Birmingham offers general employees a retirement plan through the Retirement and Relief Pension System. Firefighters and police pensions are in a separate Fire and Police Supplemental Retirement System.

The board discussed increasing the city's contribution to the fund, requiring higher rates for new employees and switching management of the funds from Morgan Stanley to the Retirement Systems of Alabama (RSA) as possible saving options.

"This is long term planning where we do what we can that's necessary to make sure our pension is whole," said Birmingham Mayor Randall Woodfin.

Morgan Stanley representatives were at Wednesday's meeting where they pledged to cut their management fees by 10% in an attempt to keep the city's business. A public meeting to hear from RSA representatives was tentatively scheduled for January 14th at 3:00 pm.

The city's pension woes are not recent or unique. In 2001 the city's pension was fully funded but an increase in benefits and unforeseen events like the 2008 housing crisis helped send the pensions on their current path. In 2017, Moody's downgraded the city's bond rating in large part because of its pension's unfunded liabilities.

The pension board's next meeting is scheduled for January 16th at 3:00 p.m.