Public Employees Deserve Pensions They Have Earned

The below letter to the editor is from Marquita Popidinski a teacher in Illinois

I am writing to express my support for our state and local public employees, including fire fighters and police, teachers and child protection workers, and other public employees who provide essential services. Illinois public pensions are modest — on average just $32,000 a year.

Most public employees are not eligible for Social Security —they rely solely on their pension for security in retirement. The state’s pension debt is the fault of politicians who failed for decades to make required contributions to the retirement systems.

All that time, public employees paid their share faithfully and in full — in most cases, 8 or 9 percent from every paycheck. A modest pension is a promise our state makes to those who serve. It’s a promise that should be kept.

I hope lawmakers will do the right thing and stand up for the police and firefighters who keep us safe, teachers who educate our children, nurses and caregivers who serve the sick and disabled, and all the other state and local public employees who are counting on the modest pension promised them. Say NO to cutting public employee pensions.

Don't Blame Public Employees

A recent article in the Economist magazine titled "Tough Times for Everyone - Except Public Sector Workers" states that taxpayers are now learning about "the banquet public sector workers have been having at the expense of everyone else" and that many public employees can "retire in their mid-50s on close to full pay."

These unsubstantiated claims--repeated endlessly in media--stand reality on its head. Such accusations are part of a systematic campaign by corporate America to mislead taxpayers and scapegoat public employees.

California public sector workers, such as teachers, public health nurses, firefighters, librarians, maintenance, park, transit, and social workers are not responsible for the economic crisis that makes drastic cuts to state and local governments necessary. These public employees earn modest, middle-class pay and benefits.

Rather, it was big business and the wealthy who gamed the deregulated financial system to make huge profits. Their speculation in the home mortgage markets triggered the Great Recession; then they proceeded to take billions in bailouts from the government; and last year, Wall Street's leading investment and financial services firms paid out a record $144 billion in compensation and benefits.

Often forgotten is that public pensions are not paid from operating budgets of state and local government but are earned through monthly employee and employer contributions over 20 to 30 years. CalPERS professionals manage the $225 billion trust fund, and 75 cents on every dollar of retirement benefits are investment earnings. The taxpayers contribute 14 cents for every dollar of benefits.

Blaming public employees for our fiscal crisis deflects from the central issue of the historic, and widening, divide between the rich and everyone else. The solution is to reform our inequitable and unsustainable system of taxation.

Let's stop pointing fingers at hard working public employees and begin to build a broad coalition to implement a responsible and progressive tax policy.

The author of this article is Martin J. Bennett, who serves as Co-Chair of the Living Wage Coalition of Sonoma County and is a member of the California Federation of Teachers Local 1946.

Teachers/State Employees: Don't blame us for this mess

The August 10 opinion piece by Dennis Byrne in the Chicago Tribune, that the state pension shortfall was caused by overly-generous pension benefits paid to state employees and teachers is provably false.

Enough, We, and the Illinois public employees we represent believe the facts matter. Even on the opinion page.

FACT -- The state's pension debt was caused by politicians who habitually refused, over decades, to pay the state's modest share of pension costs, using the money instead to stave off needed tax increases.

FACT -- Four of five state pension system annuitants rely solely on their pensions for survival. By Illinois law, contributors to the Teachers' Retirement System (TRS) and the State University Retirement System (SURS) are barred from receiving full Social Security benefits, even when they have been earned from non-education employment.

FACT -- The typical retired state employee on the standard formula -- those who do receive Social Security, including the caregiver for the disabled, the child protection worker, the state park employee --earns a pension of about $22,000 a year.

Dennis Byrne and the Tribune want the public to forget that the pension shortfall is the result of bad financial management by the state and that the present and future annuitants have always paid their share.


The truth should not be ignored or distorted. Even on the opinion page.

The following opinion piece from the Chicago Tribune was authored by Ed Geppert, President of the Illinois Federation of Teachers and Ken Swanson, President of the Illinois Education Association.

Ohio state employees’ union agrees to furloughs and no pay raises for three years

The Ohio Civil Service Employees Association, which represents 35,000 employees in nearly all state agencies, have voted to approve a three-year contract that includes no pay raises and 10 days of mandatory unpaid furloughs.

This was a no-win situation for us," said Andy Douglas, the union's executive director and chief negotiator. "Obviously, this contract was not the outcome we were seeking. However, given the economic climate and the state's budget, this union did the best it could to ensure damage to our members was limited. Given what is happening in most other states, the result could have been much worse."

The union said it dodged a proposed 6 percent pay cut with a shorter workweek

.

Public pensions take a hit from New Mexico Legislature

New Mexico state employees will see pension changes in coming years from a handful of measures recently approved by the state legislature.

Among the proposed changes:

• Longer work requirements on most governmental employees and educators before they can retire with full benefits. The change will apply to workers hired in the future, but not law enforcement and firefighters. The proposal is to take effect in July 2011, but the bill left in language stating that the changes apply to workers hired starting in July 2010.

• Restrictions on state and local government workers who retire and then return to work in a governmental job.

• Increased pension fund payments by state workers and educators during the next two years.
The change will mean a reduction in take-home pay and has drawn sharp criticism from unions representing governmental and school workers.

• Higher payments by governmental employers and workers over four years to a financially troubled program that provides health care for retirees and their dependents.

A driving force behind some of the pension legislation is concern over the long-term financial stability of the state's two large pension funds: the Public Employees Retirement Association, which covers state and local government workers, and the Educational Retirement Board's pension program. Pension funds have been hit with large investment losses recently because of the financial market meltdown.

The legislation also establishes a task force to recommend to the Legislature by October 2010 what needs to be done to ensure the long-term solvency of pension plans. It's possible that lawmakers could revisit and alter the retirement eligibility changes approved this session.

Nearly all Illinois state workers face furloughs, higher health-care costs

Illinois Governor Pat Quinn’s proposed budget for the fiscal year starting July 1 would require most state employees to take unpaid days off work and foot a bigger portion of health insurance.

Nearly all state employees, except those working in public-safety jobs or who provide direct patient care, would have to take four furlough days — one for each quarter of the year. That would reduce state costs by an estimated $36 million, according to Quinn’s administration.

In addition, current state employees and retired state workers who aren’t yet eligible for Medicare would have to pay a greater share of their health-care costs. That shift would slice another $200 million in state expenses, officials said.

Quinn also will call for overhauling the state’s pension system, and part of that would involve increasing current state workers’ pension contributions by 2 percentage points.

Other changes, affecting only new employees, would set a later retirement age and reduce pension benefits. The result would be a two-tiered, defined-benefits pension system for state workers, said Jack Lavin, Quinn’s chief operating officer.

Illinois Governor considers 2-tiered pension system

Illinois Governor Pat Quinn has proposed that Illinois offer new employees fewer pension benefits than current workers -- creating a two-tiered system.

A "two-tiered" pension system would reduce benefits for future state employees to soften the pain of paying up $54 billion in unfunded obligations to five pension systems. There would be no change for people already on the payroll.

"The people of Illinois who pay the taxes, they don't have a Cadillac pension plan, and we're going to have to take a look at everything in state government," the democratic governor said.

He would not discuss specifics of what he will propose, but dismissed the notion that it would be a defined-contribution plan like a private-sector 401(k).

States shave workforce to save money

State employees, once thought to have one of the most secure jobs with the best benefits, are increasingly worried as the recession deepens and states look to trim their salaries to balance their budgets.

Last month, California sent “surplus notices” — or layoff warnings — to 20,000 state employees. Vermont’s state employees union has offered to give up raises and take four unpaid work days, which the state says won’t save enough money. Oregon’s governor told public employees they’d have to take off 26 unpaid days over the next two years; in December, he said the number was eight.

According to The Association of Federal, State, County and Municipal Employees (AFSCME), which tracks the issue through news accounts, at least 17 states have already laid off 15,433 public employees in the last 11 months, the bulk of that from when California dealt with a budget gap by letting go 10,000 part-time and temporary employees in July.

Dwarfing the layoff figures is the number of people being furloughed; so far at least 16 states have forced employees to take time off without pay, saying that option could stave off layoffs. Just among Arizona, California, Georgia and Maryland, well over 355,000 people have already taken unpaid leave, while Pennsylvania could soon add another 78,000 and New Jersey another 80,000 to that tally.

California Governor threatens layoffs if state workers balk at furloughs

California Governor Arnold Schwarzenegger will pursue layoffs to reduce salary costs if state workers don't accept twice-monthly furloughs.

The governor signed an executive order last month requiring 238,000 state workers to take two unpaid days off each month starting in February. The state also began warning state workers with the least seniority that their jobs were threatened.

Labor unions are fighting the governor's furlough order in Sacramento Superior Court, where a judge is expected to rule as soon as today whether Schwarzenegger's plan is constitutional. The governor said at the Sacramento Press Club that if he loses the case, he will pursue layoffs instead, which pose fewer legal problems.

Schwarzenegger already has proposed saving $150 million through layoffs and "efficiencies" in his January budget; the furloughs would save $1.3 billion on top of those job cuts. The governor also wants to drop two state holidays and eliminate overtime pay for those who work on the remaining holidays.

Alaska Public Employees Support Restoration of Pension Plan

Public employees and their union representatives showed up in force this week to tell a Senate committee that the state should never have traded in its defined benefit pension plan for a 401(k)-style defined contribution plan.

The Senate State Affairs Committee held two days of hearings before moving out a bill Wednesday that would reinstate the defined benefits retirement plan for newly hired employees.

It also would repeal the two-year-old defined contribution plan giving those hired since the new plan went into effect the choice between the two. The Legislature approved the defined contributions plan in the waning hours of the 2005 legislative session after a bitter row between the House and the Senate.

The new retirement system went into effect July 1, 2006 for newly hired teachers and public employees; those workers already in the system were allowed to keep their pensions unless they chose to switch to the new plans.

Alaska State Employees Association business manager Jim Duncan, speaking on behalf of a coalition of unions and retiree organizations, said the new plan fails to provide retirees with a secure pension and adequate medical coverage, and it does not result in a cost savings to the state.

Ohio Governor Proposes Early Retirements

Early retirement packages may soon be offered to longtime state employees. Governor Ted Strickland has asked agency heads to consider offering buyouts, to trim their workforce amid another tight state budget cycle. A memo to state officials also hints at the possible closing of some institutions and large-scale layoffs.

Agencies were told Jan. 7 to begin looking at ways to trim their work force by offering to purchase additional years of service for long-term classified, primarily union, employees, allowing them to retire early.

The agencies would need to demonstrate savings before extending the voluntary buyouts, although in some cases the offers would be mandatory because of state law and union agreements.

A mandatory buyout would have to be offered if the state either closes an institution or, within a six-month period, lays off 50 employees or 10 percent of the personnel in any ''employing unit,'' which means a department, agency, state college, board, commission, bureau, council, office or administrative body.

Purchased credits, in which the state buys service time for an employee to increase his or her years on the job for purposes of calculating monthly benefits, would be limited to three years or no more than 20 percent of an employee's total state
service.

Strickland decided to look into cost-containment options after the state's December financial report outlined the budget challenges facing Ohio highlighted with warnings of a pending recession.

Jindal Calls for Limited Hiring Freeze of State Workers

Governor Bobby Jindal Tuesday afternoon announced he will sign an executive order calling for a limited hiring freeze of state workers.

The governor says there are currently 3,800 job vacancies in state government. Under the limited hiring freeze, anyone applying for a job in state government must have their hiring approved by the Commissioner of Administration.

Governor Jindal says he expects the move to save the state $25 million dollars.

Task Force: Paring Kentucky retiree benefits urged

The benefits of thousands of current and future government employees could be reduced if recommendations of a governmental task force are implemented by state lawmakers.

Most of the proposed reductions would apply only to future government workers, but the panel created by former Gov. Ernie Fletcher also suggested several tweaks to the state's health benefit plans that would mean more money out of the pockets of existing state workers and retirees.

However, the panel rejected a key proposal that would have eliminated guaranteed pension benefits for future government workers and offered them 401(k)-style investment accounts as a substitute.

The group's recommendations now go to incoming Governor Steve Beshear, who must deal with a $25 billion unfunded liability in the retirement systems that threatens to gobble up huge chunks of the state budget in coming years.

One key provision in the panel’s final report recommends that lawmakers study a variety of suggested ways to extend the careers of future employees beyond current requirements, which allow some state workers to retire in their 40s and 50s.

For example, the panel suggested lawmakers consider implementing a "rule of 85" that would require state and local government workers in non-hazardous positions to be at least 55 years old and have 30 years of service before becoming eligible for full retirement benefits.

They also recommended eliminating automatic cost-of-living raises for retirees. Instead, lawmakers would consider such adjustments on a year-by-year basis.

The retirement systems' unfunded liability, which will eventually lead to bankruptcy if not corrected, has grown dramatically in recent years as lawmakers increased benefits while failing to supply the amount of money recommended by financial analysts. Meanwhile, returns on stock market investments declined.

Rhode Island Legislator Endorses Plan to Change State’s Public Pension System

House Speaker William J. Murphy has endorsed plans to fundamentally change the public-pension system in Rhode Island, a move that may end the practice of granting guaranteed lifetime retirement benefits to new state employees and public school teachers.

Murphy, among the three most powerful elected officials in state government, first said he preferred a 401k-like system for new employees. Yesterday, he said he would create a special commission in January to study the issue. And he said he expects that commission to produce legislation to change the system before the end of the session.

Murphy acknowledged that public employee and teachers’ unions will fight the change. He said he would include labor representatives on the study commission.

In all, just three states — Alaska, Michigan and West Virginia — and the District of Columbia require state employees or public school teachers to enroll in a defined-contribution plan, according to the national council. Another six states make defined
contribution plans optional.

Money for public-employee pensions comes from two primary sources: the contributions of the employees — teachers contribute 9.5 percent of their salaries and state employees contribute 8.75 percent — and Rhode Island taxpayers. The taxpayers’ portion has increased every year since 1999: from 9.95 percent to 25.03 percent for the teachers’ pensions alone.

Officials say that the state’s unfunded liability is growing for two main reasons: most retirees are living longer, and the fund continues to suffer from the lingering effects of poor stock-market performance several years ago.

Study: New Hampshire Public Pension Costs Escalate

A recent study concludes taxpayers will have to pay more to ensure New Hampshire's retirement system keeps its promises to current and future retired state workers.

"We estimate the legislative promises made to state and local government employees and retirees will be increasingly difficult to honor without increasing state and local taxes," concludes a study of the public pension system by the New Hampshire Center for Public Policy Studies.

The center said the state may have to consider reforming the retirement system by evaluating alternative pension plans for new employees, expanding financial reporting, fully funding any proposed benefit increase and revising the assumed investment return.

The system covers more than 70,000 current and retired teachers, firefighters, police officers and state and local government workers. The study estimates that it is underfunded by $2.5 billion and the deficit is growing.

The center's study suggests that the state shift from the traditional defined benefit plan to a defined contribution plan for new employees, noting that the numbers of retirees is growing faster than employees paying into the pension fund. In addition, the average benefit is increasing, the study found.

State Senate Bill would let a quarter of Michigan State Workers retire early

Thousands of veteran state workers - more than 25 percent of them - could get enhanced pension benefits under an early retirement bill that passed the Michigan State Senate on Thursday.

The Senate voted 21-16 for the measure, which Senate Majority Leader Michael Bishop said would shrink government and help resolve the state's budget crisis.

However, Michigan Governor Jennifer Granholm remains strongly opposed to an early retirement program.

"An early out will result in more children left unprotected, more gas pumps and bridges left uninspected, fewer state police patrolling our roads," Granholm spokeswoman Liz Boyd said.

Under the early retirement plan, state workers would be eligible if their age and years of service add up to at least 75.

Currently workers must be at least 55 years old with 30 years of service or 60 years old with 10 years of service for full retirement benefits.

The plan sweetens the retirement benefit by increasing the pension formula by 16.7 percent. It is similar to plans offered several times in the past.

Pensions would be based on years of service multiplied by the worker's final average salary times 1.75 percent - up from the current factor of 1.5 percent.

Whether there are savings will depend on how many workers retire and how many are replaced.

State Employee Cost-of-living increase wins final legislative approval

A $29.7 billion state budget for next year including pay raises and new education spending received final legislative passage on Wednesday.

After months of partisan wrangling about spending priorities, the bill providing for money to operate state government in the year that begins July 1 received little debate in its final stop before heading to Blanco's desk.

Blanco can strip individual items out of the budget bill with her line-item veto
power — though the bill keeps intact the governor's spending recommendations, including millions of dollars in new spending on education and health care and in pay raises for state workers, public school teachers, prison guards, police officers and support workers.

Spending will be increased in nearly all major areas. More than 1,100 new
jobs will be added to state government. Average public school teacher pay
in Louisiana will reach the Southern regional average with the $2,375
salary hike included in the budget and a state employee pay raise of
$1,500.

Kentucky Pension Plan under Review for Possible Changes

The Louisville Courier-Journal reports a blue-ribbon commission studying the state's pension crisis will review the benefits contract with current employees and retirees, despite repeated assurances by elected officials that only the benefits of future employees were under scrutiny.

Courts across the country — including the Kentucky Supreme
Court — have given states little room to change what commonly are referred
to as "inviolable contracts" with public employees.

And some members of the Blue Ribbon Commission on Public Employees Retirement Systems wonder why the review is being undertaken.

"I think we have a pretty good understanding of what the contract should be already," said commission member Gary Harbin, executive secretary of the Kentucky Teachers' Retirement System. "We shouldn't be trying to find some way to make changes in those benefits."

As things stand now, state and local governments and school systems are nearly $12
billion short of meeting future pension obligations to their employees.

The concept of "inviolable contracts" means that retirement benefits in place when the state hires workers — including health-care benefits — cannot later be diminished for those workers.

John Farris, the commission's chairman, confirmed that an
attorney would examine the contract. But he said the purpose is not
to find a way to break the state's contractual promise to current employees
and retirees.

Farris, secretary of the Finance and Administration Cabinet, said the commission simply wants to ask an attorney questions such as whether the state could offer current employees a $10,000 pay increase in exchange for reduced retirement benefits.