Public Employee Press

Media pension attacks scapegoat public employees

By GREGORY N. HEIRES

The recession, plummeting revenue and budget shortfalls have created a perfect storm that has opened the door to a drumbeat of misprepresentation and misinformation about public employee pensions in the mainstream media.

A New York Post editorial in August, for example, charged that overly generous disability pensions for firefighters are ripping off taxpayers. "This year alone, the city will shell out $7.6 billion in FDNY tax-free disability pensions," the editorial screamed. Actually, the $7.6 billion is the city's total annual pension obligation.

"Padded Pensions Add to New York Fiscal Woes," warned the front page of the New York Times May 20. The article highlighted cases where workers boosted their pensions by putting in a lot of overtime in their last years of employment.

But not until the 25th paragraph, deep inside the newspaper, did the story mention that the typical state or municipal pension is a modest $15,941. And never did it inform readers that state law caps overtime credits for civilian city workers at 10 percent.

Wall Street eyes our money

Throughout the country, the attacks come with calls for pension givebacks, such as adding or increasing workers' contributions and raising the retirement age. The fiscal problems are also used as an argument for replacing traditional defined-benefit plans that guarantee payments according to years of service with 401(k)-like defined- contribution plans, which subject savings to the uncertainty of the stock market.

Here in New York, Mayor Michael R. Bloomberg has called attention to rising pension costs.

"The enemies of traditional pensions are trying to take advantage of the economic crisis," said Stuart Leibowitz, president of the DC 37 Retirees Association. "Wall Street sees a pot of gold there to profit from by collecting hefty fees for managing the individual savings accounts like 401(k)s that could replace defined-benefit pensions. Others simply want to reduce our benefits."

The wage-retirement tradeoff

For DC 37 members, the attacks on public employee pensions represent a betrayal of the historic covenant between municipal workers and their employer. Typical members opt for public service knowing that while their jobs won't make them millionaires, they can count on retiring with a guaranteed modest income and health-care coverage.

The traditional pension represents deferred compensation for public employees, DC?37 General Counsel Mary J. O'Connell explained. Historically, public-sector unions have agreed to lower wage increases at the bargaining table in exchange for the employer's commitment to support pensions and health coverage.

"Since Franklin Roosevelt was president, our public policy has been that people should have a decent retirement," she said. "The point of Social Security and traditional pensions alike is to keep people out of poverty."

Unfortunately, the country is moving away from that commitment.

Today, corporations have largely abandoned traditional pensions, and after three decades of stagnating and falling pay, millions of American workers now worry that they won't be able to support themselves in their retirement years.

And rather than holding up public pensions as a model success story, the owners of major media call for gutting them, a move that would worsen the race to the bottom for all workers.

Most DC 37 members are in the New York City Employees Retirement System; police, teachers and firefighters have their own systems. The average NYCERS pension is $33,194. At about $18,000, the pension of a typical DC 37 retiree in NYCERS is considerably lower.

"The media make it seem as if we are committing a crime by receiving a pension," District Council 37 Executive Director Lillian Roberts said, expressing her frustration that members are unfairly tarnished by the mean-spirited attacks on "greedy geezers" and public sector "fat cats" victimizing the taxpayers. "We have contributed to our pensions, our overtime included is capped, and we have sacrificed so that we will have a secure retirement."

Overtime used in calculating NYCERS pensions is capped at 10 percent, and disability pensions for most members are limited to one-third of the average pay during their last three years of service. NYCERS is funded through employee and employer contributions and earnings from its investment portfolio. Generally, DC 37 members must work for 30 years until they are 62 to receive a full pension.

Members don't pad pensions

"We are prohibited by statute from padding our pensions with overtime, which you wouldn't know by reading the articles and editorials in the papers," said Local 1320 President James Tucciarelli, who chairs the DC 37 Pension Committee.

"It's disgusting," he said. "They portray all city workers as greedy when in fact they really never write the truth about the modest pensions of most DC 37 members. It's totally unfair to charge that our pension costs are crippling the city's budget in hard economic times."

"We are not the problem," Roberts said. "What's more, our pensions?-?a half-billion dollars every year?-?go right back into the economy and help everybody in New York City. We have sacrificed for our pensions?-?and we will fight to protect them.