Beware: Pension Cuts Loom For State Employees
Oklahoma teachers, correction officers, firefighters and state employees beware: Conservatives here are going to push for major changes in your pension plans next legislative session, and it will almost certainly result in reduced benefits.
The specific plans haven’t been developed or, at least released to the public, but the main push will be to change the various state public pensions from defined-benefit to defined-contribution plans.
The defined-benefit plan guarantees a certain monthly amount of money for retirees. The defined-contribution plan doesn’t guarantee a certain payment amount, and it pretty much forces people to rely on investment bankers to determine how they will survive in retirement, if retirement will even be a possibility for state workers in coming generations.
Will those workers with long-time employment histories with the state still be able to retire under the defined-benefit plans? I suspect the answer to that would be probably yes, in most cases, but the change will begin reducing the money pool in the defined-benefits plans, thus precipitating an eventual crisis that will lead to even more cuts. This is just the first effort of cuts. If Republicans continue to hold super majorities in the House and Senate and retain the governor’s office, even more pension cuts are in store for state employees.
A group calling itself Keep Oklahoma’s Promises is opposing the major change in the pension plans.
The state’s pension plans currently have a collective $11 billion liability because through the last few decades state legislators, Republicans and Democrats alike, have failed to fund them appropriately. Gov. Mary Fallin and Oklahoma Treasurer Ken Miller have used the liability concept to apply their conservative “free-market” ideology to the problem. Meanwhile, the state legislature majority has been obsessed in recent years with trying to pass tax cuts for the state’s wealthy while not doing enough to ensure someone who teaches for 30 or 40 years in this state can have a modest but secure retirement income.
Rest assured that any changes in the state’s pension plans will absolutely lead to reduced benefits for future retirees. Anti-government conservatives will try to obscure this basic fact through rhetorical subterfuge about “reform” and “saving the system for future employees” while also using all the reductionist GOP clichés about limited government in vogue at the time they try to sell benefit cuts.
Let’s also be clear: If you are employed by the state and currently fall under a defined-contribution pension plan, and you vote for a Republican in upcoming state elections, you are most likely voting for less money for yourself and your family. That’s not ideology, or even, really, a partisan claim. It’s just a basic fact.
The assault on state pension plans throughout the country is the result of a conservative ideology that wants to deepen the vast disparity in wealth between the richest Americans and the middle class and poor. Conservatives want to cut taxes for rich people while reducing benefits and salaries for the backbone of this country’s workforce, which includes educators, first-responders, prisons' staff, social workers and those who maintain our public streets and infrastructure.
This anti-humanity ideology was perfectly expressed recently in a brief editorial by The Oklahoman, which, of course, supports reducing retirement benefits for state employees. In response to the argument the average state retirement benefits are modest, about $20,000 a year, the unidentified editorial writer claimed:
Reality check: Many Oklahoma private-sector workers would love such “modest” benefits. Heck, most would take any pension plan, because they don't have one now.
Heck, note this reality check: Essentially, the editorial’s logic concludes that everyone should do without a pension plan. The editorial is certainly NOT advocating for better funded or more pension plans for private-sector workers to match the modest benefits of state workers.
Heck, the editorial is also asking implicitly, what benefits can we take away from all public or private-sector workers once we start the spiral of back and forth cuts between the two groups? Here’s the conservative trick: Now that the public employees are facing cuts the private-sector employees should also face cuts. Or vice versa, and it goes on and on, until there’s nothing left of the middle class.
Right-wingers will accuse me of hyperbole and “alarmism” in the above paragraphs so let’s reduce it to an understandable formula. In the national pension debate, conservatives, such as the editorial writers at The Oklahoman, use the formula that since Worker A doesn’t have as much in benefits as Worker B, then Worker B should have his/her benefits cut, NOT that Worker A should receive an increase in benefits.
What the newspaper doesn’t address in the editorial is that many state employees have large chunks of money taken out of their paychecks to pay for a portion of the pension costs. The editorial also concludes the current system isn’t sustainable, but it really is. The state legislature just needs to appropriate additional money to it.
The ultra-conservative newspaper also favors cuts to Social Security as well, which means its editorial writers probably don’t even believe in retirement as a concept anymore, except for the wealthy, of course.
One of the major job tradeoffs for many state employees is the exchange of a higher salary and higher take-home pay than they might get in the private-sector for, as I mentioned before, a modest but secure retirement. (Many state workers haven’t received an across-the-board raise in several years.) This tradeoff is often openly acknowledged in state workplaces and is a firmly embedded idea among public employees everywhere. Conservatives want to take that tradeoff away so they can reward wealthy people through tax cuts.