On July 13, the same newspaper published an article which began: "Gov. Andrew M. Cuomo, basking in the afterglow of a legislative session that he described as “unusually successful,” said Wednesday that his top priority next year would be limiting retirement benefits for new state and city workers. He said that his inability to win such an overhaul was the biggest failing of the session that just ended."
"Not my problem," you might say. "He wants to reduce benefits for NEW workers. Mine are protected by the state constitution." Just how long have you had your head buried in the sand?
While the short range goal might be to reduce retirement costs for new workers, don't believe for a minute that the retirement benefits of current retirees are not on plenty of radar screens.
We all know that often-repeated lies soon become "facts" in the minds of many low-information voters. Sadly, the low-information voter seems to be the norm, only beginning to pay attention near an election when their votes are determined by whichever focusgroup-tested TV ad hits one of their "hot buttons," reinforcing a "fact" that "everybody knows" that has stuck to their brain.
Currently, there is a body of mythology building through repetition concerning public employee pensions. Let's begin by addressing a few of these via a column by Earl Pomeroy and Cathie G. Eitelberg which appeared on the ABC News website in which they explode the myths that you will hear from your friends and neighbors.
1)" Myth: Public employee benefits are bankrupting states. Not so. According to publicly available data gathered from government websites, less than 4 percent of state budget expenditures go to funding pension benefits." (For a more complete analysis, see this article published in the McClatchey chain of newspapers on March 6, 2011.)
2) "Myth: Public pensions are overly generous. Hardly. The most recent U.S. census data reveals the average state employee has a retirement benefit of $22,000 per year." For a more complete analysis of the "public vs private" pay and benefits myth, click here to go to the blog post concerning that subject.)
3) "Myth: Public pension funds are going broke and will require billions in taxpayer bailouts. Nope, sorry....Some forecasts, discussed in certain academic circles and regurgitated unchallenged by the media, have many public pension plans running out of funds by 2020. But these estimates are based on flawed assumptions, such as no additional contributions and long-term low investment returns. And, that's to say nothing of the $3 trillion in assets public pension plans hold to pay future benefits."
To further address this last point, the NYS Teachers' Retirement System, in its latest newsletter, quoted part of an article from the March 1, 2011 issue of the Columbia Journalism Review taking the NY Times to task for publishing a Feb. 28 article with the following lead paragraph: "Lawmakers and governors in many states, faced with huge shortfalls in employee pension funds, are turning to a strategy that a lot of private companies adopted years ago: moving workers away from guaranteed pension plans and toward 401(k)-type retirement savings plans."
The Times article gives the following as an example of the "huge shortfall": "Utah decided to adopt a 401(k)-type plan after the stock market plunge in 2008 caused the shortfall in the state's pension plan to balloon to $6.5 billion....Under the new plan...the state's retirement contributions for new workers will be roughly half that for current employees, potentially saving $5 million a year for every 1,000 new workers hired."
And now for the rest of the story. NYSTRS continues: "...the Utah pension fund, at the end of 2009, was about $2.8 billion in the hole. If it rose by 15% in 2010, which is a pretty reasonable assumption given the performance of the stock market, the gap is likely to have been eliminated. But even the gap at the end of 2009 was less than one-tenth of one percent of Utah's state income." [Emphasis mine.]
Wow! What a "huge gap!"
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