The city's pension system is in a mess. Years of chronic underfunding and the devastating effects of the recent recession have left the city with only about 45 percent of what it needs to pay for all of the benefits promised to current and former employees.
On top of the mess is a controversial program known as DROP - the Deferred Retirement Option Plan - which is designed to allow experienced employees to retire but remain on the job up to four years to train their replacements. Over the years, the program has expanded beyond its original target - mostly police and firefighters - to include all city workers and, until recently, elected officials. Some senior officials and elected leaders have even returned to work after their "retirement."
silence is over in negotiations between the city of Philadelphia and
two municipal unions that have operated without contracts since 2009.
City Council put pressure on Mayor Nutter today to stop demanding
concessions from workers and settle the contracts, fast. Read Seventy’s
HOW PHILLY WORKS for the story behind this unfolding saga.
DROP to Stay, Council overrides Mayor's Veto (September 15, 2011)
City Council voted 17-0 to override the mayor's veto of legislation that would retain – although in an amended form that Council insists will lower costs – the DROP program. Council first approved the bill in June, but the Mayor vetoed it and asked Council to pass a different bill to eliminate the program completely.
COMMITTEE OF Seventy URGES COUNCIL TO PASS BILL TO ELIMINATE DROP (June 8, 2011)
The Committee of Seventy appeared before City Council in support of eliminating DROP. To read the Committee of Seventy's testimony, Please Click Here
Following a tumultuous Municipal Primary season that saw several city political leaders retire or lose reelection over their participation in DROP, the Committee of Seventy takes a hard look at what is next for the troubled program in this latest installment of our IN THE KNOW series.
To read the Committee of Seventy's Amicus Brief, Please Click Here
As part of our In the Know series
, Seventy looks at the tough political choices on DROP facing City Council members when they get back from summer break.
PICA endorses efforts to end drop
The head of the Pennsylvania Intergovernmental Cooperation Authority
the state watchdog agency that monitors the city budget, joins
calls to end the controversial DROP retirement program. The PICA board
voted to support an end to DROP and endorse a Boston College
that showed the program had cost the city $258 million over 10
years. The vote came in response to a request from the Committee of
Seventy for PICA to take a clear position on killing DROP. The chairman
wrote to Mayor Nutter outlining the PICA board's position on Sept. 22, 2010. A PDF copy of that letter is available here
Mayor Michael Nutter released a study
on Aug. 3, 2010 that showed that DROP has cost the city more than $258 million over 11 years - more than $22 million per year - and has failed in its goal of keeping experienced employees from retiring before their replacements are trained (Here's the full report
). He called on City Council
to eliminate the plan when it returns from summer recess. The Committee of Seventy quickly urged Council
to abolish the program. Seventy had called for the study in 2008
, the day after Mayor Nutter took office.
WHYY's Radio Times examines the controversial program. Committee of Seventy Deputy Policy Director Sean Scully
joins the conservation (audio available at the site).
Some previous resources for understanding DROP and the pension mess:
Pensions: The Elephant in the Living Room (summer, 2009)
COMMITTEE OF SEVENTY CALLS ON CITY SOLICITOR SMITH TO REVIEW DROP (03/26/2009)
Zack Stalberg and Frank Rizzo discuss the infamous DROP program on Philly From Scratch: The Podcast (March 30, 2009)
COMMITTEE OF SEVENTY URGES REMOVAL OF ELECTED OFFICIALS FROM “DROP” (05/13/2008)