In 1980, about 80 percent of those who worked for large private sector and public sector employers in the United States were covered by traditional, defined benefit (DB) pension plans that provide plan participants and their beneficiaries with a modest, but meaningful, secure income in retirement; and
That percentage has remained steady in the public sector. The vast majority of AFSCME members are covered by a DB plan, but according to the Bureau of Labor Statistics, only 30 percent of private sector employees at companies with more than 100 workers were covered by a DB plan in 2013; and
According to the National Conference of State Legislatures (NCSL), 48 states have made substantial changes to statewide plans since 2009, including increasing employee contributions, raising eligibility standards for vesting and normal retirement, cutting benefits, or all of the above; and
In many parts of the country, anti-worker legislators and organizations have intensified their efforts to cut benefits or close DB plans and replace them with defined contribution (DC) individual salary savings accounts, thus shifting costs and risks from the employer to workers and retirees; and
Groups that want to eliminate DB plans often claim the systems responsible for providing retirement benefits are facing a financial crisis even though state and local government retirement systems collectively held nearly $4 trillion in assets as of December 31, 2013 and are funded at an average level of 73 percent; and
Those same groups claim that DB plans are unaffordable, even though on a nationwide basis, pension contributions made by state and local governments account for roughly three percent of total spending; and
DC proponents are not being honest when they claim DC plans will cost taxpayers less, because the National Institute on Retirement Security concludes that a well-managed DB plan costs half as much as a DC plan to provide the same benefit; and
Recent efforts to convert DB plans into cash balance plans would result in lower benefits for plan participants and, because cash balance plans base benefits on an employee’s career average salary, would greatly reduce benefits for career employees; and
AFSCME believes in a society of opportunity in which all workers not only earn a living wage and can afford to see a doctor when they are sick, but where we all can reach our full potential in our chosen careers and retire with dignity when our work is done.
THEREFORE BE IT RESOLVED:
That AFSCME continue to lead the national fight to preserve defined benefit pension plans and to protect the pension benefits our members earn and receive; and
BE IT FURTHER RESOLVED:
That AFSCME continue to partner with other unions and the National Public Pension Coalition on state and municipal campaigns when necessary; and
BE IT FINALLY RESOLVED:
That AFSCME International continue to work with councils and locals to protect defined benefit plans and to provide educational material and technical support on issues impacting members’ retirement security.
INTERNATIONAL EXECUTIVE BOARD