April 14 (Bloomberg) — Memphis has underfunded its city- run pension plan since 2009, putting the cash toward its budget. Tennessee lawmakers want to attach a cost to that kind of scrimping on retirement expenses.

Legislators are poised to take up a bill this week requiring cities, school districts, utilities and other entities with their own pension plans to contribute 100 percent of what actuaries say is needed to meet annual obligations. If they don't, Tennessee will do it for them, diverting tax revenue the state disburses to municipalities.

The measure may mean hard times in the home of the blues. Memphis, the state's most-populous city, has been paying less than 25 percent of the actuarial guidelines. It would be responsible for an additional $70 million yearly — equivalent to 11 percent of its budget, or half the annual cost of its fire department. Moody's Investors Service lowered its outlook on the city to negative in December, partly because of the strain from retirement benefits.

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