Public Employee Press

Politicians seek to destroy the dignified retirement of public service workers
Killing pensions to benefit the 1%

By LEE A. SAUNDERS

Rupert Murdoch's Wall Street Journal, the bible of the wealthy 1 percent, is continuing its push to gut the retirement security of millions of middle-class workers across the country while enriching the Wall Street moneymen who just three years ago pushed our economy off the cliff.

The Journal just published a shameful op-ed that called for eliminating guaranteed pensions for public service workers. Having virtually wiped out decent retirement benefits for private-sector employees, these folks won't be happy until secure retirement is a thing of the past for all working Americans.

Typical AFSCME members - men and women who repair our streets, care for the sick, clean our government buildings and protect our children - receive pensions of approximately $19,000 a year after a career of public service. These workers earn and pay for their pensions with employee contributions ranging from 3 percent to 10 percent of their pay. These paycheck deductions, combined with investment earnings, usually account for 75 percent or more of all pension benefit funding.

Public employees have already accepted reductions. Fully 40 states have cut benefits and/or increased employee contribution requirements in the past two years. AFSCME has shown that we are willing to work with government officials at all levels to enact sensible pension reforms.

The economy's collapse in 2008-2009 took its toll on everyone's retirement savings. But our nation's public pension systems, which were fully funded before the crash, earned their highest returns in decades in fiscal year 2011 and are continuing their robust recovery. Pensions continue to yield irreplaceable retirement security to millions of Americans who provide public services. Yet, the corporate-backed opponents of pensions are creating a false myth that the system is falling apart, with state and local governments going broke because of clerical workers' $19,000-a-year pensions.

The Center for Economic and Policy Research tells us that projected state and local government pension funding shortfalls in most states are manageable - under 0.2 percent of projected gross state product for the next 30 years. Because pension payments are spread over generations, funding needs can remain stable despite short-term economic setbacks. These are facts that the opponents of public pensions simply ignore as they seek to punish workers for Wall Street's psychopathic behavior.

The 401(k) failure

Andrew Biggs and Jason Richwine - representing two right-wing, corporate-funded propaganda mills, the American Enterprise Institute and the Heritage Foundation - were given prime space on the Journal's op-ed page to push for radically transforming the retirement savings of working Americans into bonuses for Wall Street bankers. Their reckless plan to end defined pension benefits would gamble the retirement savings of millions of working, middle-class Americans in the 401(k) casino. Their plan would cost governments more than the current system and force taxpayers and public workers to enrich Wall Street firms that have already demonstrated their inability to produce adequate resources to meet retirees' needs.

While pension funds face manageable challenges, the same cannot be said for the failed 401(k) system that Wall Street and corporate chieftains have dumped private-sector workers into. After three decades of experience, we know that 401(k)s fail the one true test of effectiveness: providing economic security in retirement. The Journal itself admitted last year that the median household with a 401(k) has less than one-quarter of the savings needed for retirement. Yet its editorial page editors continue their misguided crusade against workers' economic security.

Instead of working to fix the system they forced on workers, the right-wingers are now trying to eliminate any semblance of retirement security for the remaining working Americans - all to benefit the folks at the top of the income ladder. Instead, we need to ensure that more workers in our country have safe, guaranteed retirement incomes and reject the extremists who want to transfer more of America's wealth to the top 1 percent.

Lee A. Saunders is Secretary-Treasurer of the American Federation of State, County and Municipal Employees, AFL-CIO, DC 37's national union