Birmingham Retirees Stunned as Pension Raise Halted Due to Budget Worries

BIRMINGHAM, Ala. ( WBRC It has been 25 years since the city of Birmingham’s retired employees have received an increase in their monthly pension payments, and it seems this wait continues for now.

Not long ago, there was significant optimism when the city’s pension board agreed to grant a $400 monthly boost to retirees. It could have been the first raise in decades. However, Mayor Randall Woodfin—who additionally chairs the pension board—now states that the hike has been put aside temporarily.

"If there were extra money in the pension fund, I wouldn't be here discussing this with you. With additional funds, the pension board would suggest dispersing them, but since there isn't an excess, we're asking for the operational budget to cover this rise," stated Mayor Woodfin.

Woodfin explained that the vote held earlier this month was not binding.

"It was merely a suggestion, not obligatory," stated Woodfin.

The explanation did not go over smoothly with every single board member. Dexter Cunningham, who serves as a member of the pension board after retiring from the Birmingham police force, voiced his irritation regarding the change of stance.

"I would think that someone would be true to their word," stated Cunningham.

Nevertheless, some members of the board still hold out hope for potential compromises. Board member Stephen Cook pointed out the existing framework that permits salary increases whenever the funds become available.

"As far as the pension managed by the board members is concerned, it enables us to provide a cost-of-living adjustment whenever there are excess funds," stated Cook.

On a correspondence dated April 15 Woodfin presented the figures: The latest yearly contribution to the pension fund exceeded $35 million. However, applying the $400 raise universally would necessitate an extra $18.1 million for the upcoming fiscal year. Cunningham contends that these resources ought to be accessible, given the city’s financial strategy.

"He serves as the CEO of Birmingham City. It is he who handles all the forecasts. Given this, someone privy to financial matters and revenue predictions wouldn’t likely support initiatives that aren't realistically feasible," stated Cunningham.

The mayor states that the hike was not meant for every retiree but specifically for those getting the legal minimum amount. Currently, only 33 retirees get the $400 monthly basic payment, with an additional 24 widows receiving $320 each month. However, most recipients are obtaining considerably higher amounts.

"Starting from 2017, the system mandates that employees must work for 10 years to qualify for a lifetime pension. Therefore, although $400 represents the legal minimum, it’s important to know that the typical retiree usually gets approximately $2,200 per month," explained Woodfin.

He mentioned that those who would be part of this proposed change have only about six years of experience on average, which is considerably less than the current requirement of ten years needed to earn a lifetime pension.

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