Retired former employees of the City of Birmingham seeking an increase in monthly pension payments got a clear message this week from Mayor Randall Woodfin, chairman of the pension board.

“There is no surplus,” Woodfin said Tuesday at the Birmingham City Council meeting.

The Birmingham Retirement and Relief System board voted April 10 in favor of a $400 hike per retiree in monthly benefits.

“The board’s vote was a recommendation, not a binding vote,” Woodfin said.

The 3,700 city retirees receive an average of $2,200 per month, Woodfin said. “The city has a very generous pension,” he said.

In calling for an increase, members of the board pointed out that some recipients receive as little as $400 a month, the statutory minimum payment.

But those who receive the minimum may have as little as six years of service as a city employee, Woodfin noted. Receiving a city pension now requires a minimum of 10 years service, he said.

There are only 33 retirees receiving the minimum pension based on their time of service, Woodfin said. There are also 24 spouses of former employees receiving the $400 minimum pension, he said.

“You get out what you put in,” Woodfin said. “Those are benefits based on how long you worked for the city.”

The money for the hike is not currently available in the pension fund itself, he said. “It does not have a surplus to fund an increase,” Woodfin said.

To meet the request for a $400 additional payment per retiree per month for a year, the city would have to dip into its operational budget to find an additional $18.1 million, Woodfin said.

The city already invests $35 million per year into the pension fund and has stabilized it from where it was – underfunded and negatively affecting the city’s credit rating – when Woodfin took office in 2017, he said.

City Council member Valerie Abbott, responding to Woodfin’s report, agreed with him that it didn’t make sense to spend an extra $18.1 million from the operational budget for a pension payment increase. She noted that she’ll be retiring at the end of her term this year and applying for a pension, but she doesn’t want to destabilize the city’s pension program.

“This doesn’t sound fiscally responsible to me to do a $400 increase when we don’t have a surplus,” Abbott said.

The cost of such an increase would be $4,800 per year for each of the retirees, Woodfin said.

Woodfin said it’s premature to say what will be proposed in the upcoming year’s budget, since the city is currently working out the details including income projections.

He addressed his concerns about calls for increasing pension payments in an April 15 letter to retirees.