“From state legislatures to Congress to tea party rallies, a vocal backlash is rising against what are perceived as too-generous retirement benefits for state and local government workers. However, that widespread perception doesn’t match reality,” according to McClatchy Newspaper’s Washington D.C. bureau.
“A close look at state and local pension plans across the nation, and a comparison of them to those in the private sector, reveals a more complicated story. However, the short answer is that there’s simply no evidence that state pensions are the current burden to public finances that their critics claim.
“Pension contributions from state and local employers aren’t blowing up budgets. They amount to just 2.9 percent of state spending, on average, according to the National Association of State Retirement Administrators. The Center for Retirement Research at Boston College puts the figure a bit higher at 3.8 percent.”
The rest of the article is here.
Filed under: Uncategorized
See also “Public Pensions 101,” by Dean Baker (March 7, 2011).
Baker is debunking the distortions the right has used to attack public employee pensions.
Excerpt:
“At the center of the right’s story is the view that governments are somehow being reckless or irresponsible when they provide guaranteed pensions for their workers. They tell us that these guaranteed benefits will bankrupt state and local governments, imposing impossible burdens on future taxpayers.
“This story can be easily shown to be untrue. While the right has been scaring the public with talk of a trillion dollars in unfunded liability in state pensions, this sum can also be expressed as about 0.2 percent of state income over the timeframe in which the liabilities will have to be paid.
“In other words, if states raise 20 cents in taxes or cut 20 cents in other spending for every hundred dollars of future income, they will be able to meet their current pension obligations. This is not a trivial sum, but it doesn’t seem likely to bankrupt our youth either.
“Furthermore, the vast majority of this shortfall was due to the plunge in the stock market that followed the collapse of the housing bubble. Overly generous pensions were not the problem. The problem here were the greedy Wall Street types who profited from the housing bubble and the incompetent economists who did not see it. Of course the market has recovered much of its losses, so future years’ pension reports are likely to show that most of shortfall has already been eliminated.”
[...]
“Most private sector workers formerly enjoyed defined benefit pensions, but these pensions in the private sector are now a fast dying relic. Rather than bring about a downward leveling by eliminating defined benefit pensions for public employees, it makes more sense to take steps to re-establish defined benefit pensions for all workers.
“Defined benefit pensions did not create this economic crisis. Citigroup, Goldman Sachs and the other giant banks did. It says a lot about the state of politics that these too-big-to-fail banks seem likely to survive the crisis, while defined benefit pensions may not.”
TRUTH by right wing Republicans is something they have a proven, lousy track record.
Folks pay in to their retirement and consistently DO NOT GET RAISES…Cost of Living or other for several years in a row. Via negotiations, and they are negotiations, some very hardball, benefits are determined and agreed to.
The Counties in CALPERS is all negotiated individually, and folks I know have left State Employment for better pay and/or benefits at a county position that is the same or similar.
Funny that most State jobs require a college degree when similar job in the private sector often DO NOT. Even so, private workers do get more pay many times.
Anyway, the the pay and benefits are negotiated and I spent the last 20 years in management, so I know what management does in negotiations, and generally there are no simple negotiations. Once in a blue moon the Governors office will say X is off limits for change so give in on something else, perhaps y or z.
In my opinion….You can no longer believe a word the say, from local to the highest elected position.
http://www.camajorityreport.com/index.php?module=articles&func=display&aid=4616&ptid=9