More than 250 police and firefighters have quit in Memphis and new recruits are proving difficult to attract, after the city opted to end its traditional defined-benefit pension and cycle a portion of retirement benefits for many current employees next year into a 401(k)-style account, the Wall Street Journal reported today. Memphis Mayor A C Wharton, Jr. said that a widening retirement gap in his city left him with “no other option” than to trim guaranteed payments from an existing pool of employees. Obligations soared to $554 million as of Dec. 31, from a surplus of $94.1 million just six years before. The Memphis pension’s investments were pummeled during the financial crisis, with its mid-2008 assets of $2.2 billion plummeting by 18 percent in a year to $1.8 billion. Its funded ratio sunk during that time from 104.5 percent — a surplus of assets — to 79.8 percent. Nearly 675 police officers, out of a uniformed force of about 1,300, took a sick day in early July to protest the proposed cuts. After a wrenching political debate, the City Council voted in December to end a defined-benefit plan common among public employers for more than 40 percent of its 4,100 employees.
