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Pensions: The Sky Is Not Falling

May 04, 2010

Whenever the economy is in dire straits, pundits and demagogues start looking for scapegoats. An all-time favorite is the myth of public employees and their allegedly fat – yet underfunded – pensions. The latest wrongheaded piece to promote this story is a USA Today op-ed printed on May 3, 2010 claiming that:

“Many states have lavish programs that allow workers to retire in their 50s with ample pensions — and health insurance to cover them until Medicare kicks in.”

But, as AFSCME President Gerald W. McEntee points out in a response published in the same paper:

“The typical public employee represented by AFSCME earns, on average, about $18,500 a year in retirement after a career of public service. For some, this is their only source of retirement income because they do not qualify for Social Security benefits.”

Are these the lavish programs critics are talking about?

USA Today goes on to say that “some states have simply failed to put away adequate funds to cover” these programs’ benefits. While that may be true, how is it the fault of public employees that politicians have ignored pension contributions, or that – thanks to Wall Street’s recklessness – pension funds got smacked around in the last few years?

Moreover, are these problems unsolvable? Not if you look at the facts. As Pres. McEntee states:

“[O]ur public pension plans are designed for long-term stability, and virtually all of them have sufficient resources to weather this financial storm. More to the point, our pension funds can and will be rebuilt as our economy improves.”

This is why proposals such as converting public pension plans to 401(k)-type programs – a position advanced by the USA Today and many right-wing pundits – are so harebrained. Why would we want to put our hard-earned retirement funds in the hands of the same Wall Street investors that gambled away trillions of dollars and generated the worst financial crisis since the Great Depression?

It is time to debunk these absurd claims and expose them for what they are: yet another attempt at undermining the hard work of public employees and the vital services they provide.

For more information, check out the Three Myths About State and Local Government Pension Plans and other interesting articles about public employee retirement benefits at afscme.org/pensions.

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