The Philadelphia Housing Authority has negotiated a contract with the union District Council 47 which transitions away from a traditional pension plan.
The plan freezes the pension plan. From now on, PHA will contribute to a 403b plan, which is similar to the 401k plans common in the private sector. Workers will still get pension checks based on credits they have already earned.
Cathy Scott, head of the union local, explained Thursday why they made the deal.
“Part of the problem with that plan is, because they were hiring all non-union people, there were really no new employees going into the plan,” she said. “So there were some significant challenges that plan had.”
Scott said without new union members, the pension fund would soon run into trouble.
When asked if she would consider a similar deal for the city, her response was an emphatic “No.”
“We believe that the pension plan liability with the city is purely because the city did not fund it, in conjunction with the stock market,” Scott said. “We believe the stock market will come back and that there are progressive ways to deal with the pension plan.”
District Council 47 has been working for the City of Philadelphia without a contract for about three years. Pensions have been a major sticking point in negotiations.