Friday, February 4, 2011

The pension issue from a teacher's perspective

The president of the Westchester-Putnam Retiree Chapter of New York State United Teachers responds to calls for changes to the public pension system.
One of the news articles also stated that the pension system is "taxpayer funded." That is only partially true at present. The vast majority of state pension funds come from investments. When the stock market declined, employer contribution was needed to compensate. But, for a number of years, the various pension funds were basically self-sustaining and in all likelihood will return to that state as the recession fades.
While it is true that they are only partially "taxpayer funded", the fact that the government guarantees teacher pensions has necessitated significant taxpayer contributions.
Defined-benefit plans suit them and the agencies for which they work. These pension plans are cheaper to run than 401(k) plans, according to the New York State Teacher Retirement System.
Consider also that government employees are paid less than their counterparts in private industry, despite similar education and qualifications. Compare the salaries of a high school office manager with that of his/her peer in private industry. The difference is substantial. The trade- off is that the civil service person has more job security and a defined benefit retirement.
I've seen evidence-based arguments on both sides of the private vs. public pay issue.
Given the volatility of the stock market and the turmoil retirees with 401(k) plans experienced in 2008, we should be looking at ways to extend defined-benefit pensions to all workers and to allow them the flexibility to change jobs with no loss of retirement. Instead of attacking a system that supports retirees and in turn their communities, let's look at ways to ensure that all our citizens can enjoy a secure retirement.
I don't think popular opinion supports expanding defined-benefit pensions to more workers.

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