November
2, 2011
Letters to the Editor
The Washington Post
1150 15th Street, NW
Washington, DC 20071
To
the Editor,
The
author of the October 28th opinion piece “How about a race to reform state
pensions?” should take a look at the National Conference of State Legislatures
(NCSL) report on public pension reform. NCSL documents that 39 states have
taken action since 2010 to ensure the long-term sustainability of public
pension funds.
These
reforms include everything from increasing employee contribution rates, to
raising retirement ages, and even suspending cost of living adjustments. All of
these changes are absent Federal intervention, and state and local pensions are
not seeking Federal assistance.
Another
key fact excluded from the piece – pensions are not the driving force behind
what ails state and local budgets. The Center on Budget and Policies determined
that pension contributions average just 3.8 percent of state and local budgets.
And in fact, in most states the majority of pension benefits are paid for with
employee contributions and investment returns – not tax dollars.
The
reality is that vast majority of plans were in a strong financial position
before all investors were hurt by the economic crisis. The same cannot be said
for the underfunded 401(k) system for private sector workers. Currently, the
median 401(k) account balance is $18,000 – nowhere near the assets needed for
Americans to be self-sufficient in retirement. This is particularly troublesome
given the private sector trend away from pensions, and that the volatility of
the stock market makes it difficult for Americans to predict their nest egg.
Research
shows that an overwhelmingly majority of Americans believe that all workers
should have access to a pension, and that the disappearance of pensions makes
it impossible to achieve the “American Dream.” Perhaps the real area for reform
is rebuilding the crumbling retirement infrastructure for private sector
workers?
Sincerely,
Diane Oakley. Executive Director
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