Moody's mentions Chattanooga's fire and police pension reform

Moody's mentions Chattanooga's fire and police pension reform

April 4th, 2014 by Joy Lukachick Smith in Local - Breaking News

Chattanooga Mayor Andy Berke

Photo by Tim Barber/Times Free Press.

A national credit ratings firm praised Chattanooga in a weekly report for reducing the city's unfunded liability through the fire and police pension reform.

In Moody's Investors Service's weekly credit outlook, the report outlines how Chattanooga officials cut rising pension costs and officials estimate the city's pension liability will shrink by $86 million.

In March, the City Council approved the reform that will hike public safety employees contributions by nearly 40 percent, decrease retirees cost of living adjustments and save the city an estimated $227 million over the next 25 years.

The reforms were birthed from six months of debate by Mayor Andy Berke's appointed task force made up of law enforcement, union and business leaders. Berke created the task force last July to study how to rein in the city's $150 million unfunded liability.

"The reforms were achieved through a collaborative effort between the city, police and fire employee groups, community members, and the board of the Fire and Police Pension Fund," the report states. "Still, the city could face litigation over the changes, in part because Tennessee law prohibits changes to vested accrued benefits."