March 18, 2009

Life Experience Answers Loughlin's Question

Justin Katz

A moment's review of one's own life will likely provide plenty of basis for answering Rep. John Loughlin's rhetorical question, by which he argues for preserving the pension scheme for vested employees:

How can we say to a valued teacher or employee that has contributed to a plan for ten, twenty, or nearly thirty years in accordance with the terms the state agreed to, that they now must work a decade longer and receive a reduced retirement?

When I was laid off from my job editing high-tech market research, I was fully vested in my portion of the company's Employee Stock Ownership Program. Thus, I kept the plan's current value, and I had the option of holding it or cashing it in, but it would have been ridiculous of me to expect the company to continue making its contributions. Perhaps you've known people who invested time and money in education and resources for careers that simply weren't as lucrative when the hopeful students were ready for them; such people are owed neither jobs nor refunds.

The simple fact that an interest group — such as Rhode Island's powerful unions — extract a promise from particular politicians cannot be taken as a guarantee that the government will permit general calamity in order to preserve benefits that no longer represent reasonable expectations. If they don't like the new terms of their employment, they have the same option that the rest of us have: Look elsewhere.

If Rep. Loughlin wishes to do right by the state's employees, he'd be better off trying to persuade them that making necessary adjustments now is the fair and just path toward honoring commitments as closely as possible while mitigating the suffering that Rhode Island's policies have imposed on its people.

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Loughlin: Yet another no good RINO wolf wearing a sheep's costume. (He's dualy sheep and wolf) What a Party!

Posted by: Rasputin at March 18, 2009 11:51 AM

First of all, let us not forget that the pension system (and indeed all of the public sector union contracts around the state) are not the result of “collective bargaining” but “political bartering.”

As such the taxpayers owe no moral duty to uphold the political promises made to special interests. If we weigh the equities the average citizen in the state is the innocent party, while the public sector workforce does not have “clean hands.”

The only fair compromise is a “pension freeze” in which as of a date certain pension benefits are frozen in place. In other words, someone with 15 years of “state service” would still get whatever pension benefit they would get under the current system as of that date, similar to them having some sort of benefit had they quit on that date. Going forward those employees would start participating in a 401(k) type plan.

The older workers would still get a very generous pension, far better than those of us in the private sector who pay for it, and most of us for whom there will be no pension whatsoever. The younger workers will still get a pension, and have time to accrue assets in the 401(k). That they get any pension at all still puts them far ahead of the private sector taxpayers who are footing the bill.

Now that the state of Rhode Island has hit the financial wall that was created by the General Assembly, the politicians there are trying to finesse the issue - minimizing the pain to their union bosses while trying to make it appear to the average citizen that they are taking the moral high road (as they slip their hands deeper into our wallets seeking to extract billions of dollars to bail out the union pension system).

I’m sick and tired of politicians seeking to hurt me financially in order to bail out their friends and supporters, be they campaign contributors, banks, labor unions or any other special interest.

Posted by: Tom W at March 18, 2009 12:57 PM

I'll often hear these public union people say that they need the pension because they can't collect social security. Ok, so there's the possibility that it'll be there for me, but I keep hearing economists saying that it won't. So what do I do? I set up my own financial retirement plan. I take some of my own post-tax money and invest it in various areas, in case SS isn't there. I take advantage of my employer's evil, evil 403b plan. Basically, I'm being responsible for myself and my family. Are these union people seriously going through life expecting that their pension will be their sole source of income when they retire? I lost money during the economic downturn, and so will the pensioners, if the politicians allow it.

Posted by: Patrick at March 18, 2009 1:12 PM

>>I'm being responsible for myself and my family.


What's the matter with you?

Don't you know that now we have change you can believe in?

Now we can all act as if we're government employees, for the government will take care of our every need ... and that the rich will pay for it all?

Welcome to the new workers paradise, comrade (btw, working will be optional in our workers paradise ... and have as many the babies you'd like, and marriage will be optional too).

Posted by: Tom W at March 18, 2009 5:39 PM

But as you yourself say, you could have cashed in your stocks. State workers and teachers cannot--our pension contributions can be cashed in only when and if we hand in our resignations--not before. The cash-out is ONLY what the worker contributed, no interest, no employer contribution, nothing. Ten percent per year for 28 years and this is what we will receive--just what we put in. It's not portable either. After contributing a lifetime, if we don't like the new terms of employment, we can't leave without losing everything. Unlike the stock market, once these pension reforms are legislated, it's all over. It is akin to a permanent stock market crash--no hope of bounce-back. Please don't forget that it was not the unions that neglected to fund the pensions during the 90's. We had no choice but to pay our share. the Gov. wants to continue this as well next year, when the cities and towns will be allowed to "defer" pension contributions once again. What would happen to us if we all tried to "defer" our mortgage payments, gas, electric, food bills...

Posted by: Tanya at March 21, 2009 12:14 PM
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