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Retirement Insecurity

Instead of solving America’s retirement crisis, politicians are making things worse

By Clyde Weiss

America’s retirement crisis is real, but it’s not because something is wrong with having a pension. Consider this: 75 percent of Americans nearing retirement in 2010 had less than $30,000 in their 401(k) account. These folks who are nearing retirement will actually have to work as much as 19 years longer than they currently would to make ends meet. And today, the poverty rate is nine times greater in older households without pensions.  So what have politicians decided to do in order to fix this problem?  Snatch pensions from the middle-class workers who have them.

It makes no sense, but at least 43 states have made changes over the past several years to undermine pensions or do away with them entirely for new workers. Corporate-backed politicians are eager to extend retirement ages, increase employee contributions, suspend cost-of-living adjustments for retirees and force more workers into risky 401 (k) private investment plans.  Why? Because if they can squeeze more from retirees and middle-class families, their wealthy donors won’t have to pay their fair share.

AFSCME members across the country are bearing the brunt of these bad choices. In the stories that follow, three share the very real impact of gutting retirement security for the middle class.

Stephanie Curtis
Stephanie Curtis


A 20-year employee of the New York City Law Department, Stephanie Curtiss spends her work days helping the city handle lawsuits as a paralegal investigator. “The law department saves the city money on a regular basis,” she says, proudly.

Curtiss, who is also chapter chair of the law department for Local 1549 (DC 37), counts on the city to live up to its promises to her and her co-workers when they retire. “When you take a job for the city or state, your pension is part of that promise,” she said.

But earlier this year, she realized that Gov. Andrew Cuomo’s “Tier 6” retirement plan would make all state public service employees hired on or after July 1 work longer before they could retire. They also would have to contribute more towards their pension and accept other changes that lowered the value of their retirement package. In addition, newly hired employees would be required to choose between the reduced pension plan or a self-directed, 401(k)-style retirement plan that offered no guarantee of returns. (Remember: a 401 (k) is not a pension. A pension has defined benefits. A 401 (k) has only defined contributions.)

Curtiss worried that diverting money away from the pension plan would put her own retirement security at risk. After years of dedicated service to the city, she explained, “politicians were going to undermine us and say, ‘This is the thanks we give you,’ which is no thanks at all.”

She decided to fight back to preserve real pensions for the next generation of workers by enrolling in AFSCME’s Faces and Voices training program. There, she learned how to tell her story through the local media, to reach and educate the public in her community. She also participated in rallies, made phone calls, lobbied lawmakers in Albany and spoke at a budget committee hearing “to make our voices heard and represent how Tier 6 was going to be detrimental to our members,” she said. “We stayed in their faces. We didn’t get everything we wanted, but we got some things.”

They got lawmakers to drop the 401(k) plan and to roll back the proposed retirement age for new employees from 65 to 63 (it was 62). They also prevented a two-year increase in a workers’ vesting period, and blocked nearly half of the proposed total lifetime pension cuts.

It’s a battle in an ongoing war, and Curtiss will keep on fighting. “The only thing the average city worker wants is to be respected, to be treated decently, and for people to tell the truth,” she said. Curtiss will make sure they tell the truth about pensions.

Debra Schumacher
Debra Schumacher


“If the state had been doing what they were supposed to do, we wouldn’t be in this situation,” says Debra Schumacher, a steward in her union, the Kansas Organization of State Employees (KOSE) AFT/AFSCME Local 300.

Schumacher is referring to the failure of politicians to meet their responsibility to state workers by making necessary contributions to fund their pension plan. While state employees are required to make their regular pension contributions, the state hadn’t been paying its recommended share to the retirement system since 1973. That’s creating an estimated $8.3 billion funding shortfall between now and 2033.

Lawmakers in May forced current employees to pay significantly more into their pension plans starting in 2014, or face cuts in future benefits. Also, starting in 2015, new hires must enroll in a hybrid (cash balance) plan that has characteristics of both a traditional pension and a riskier 401(k)-style plan.

Schumacher, a human service specialist in the Department for Children and Families, hopes to retire in a little more than three years but worries about the future. She, like most of her department’s workforce, has more than 20 years on the job and looks forward to retirement – but wonders if her pension will be sufficient. “They made a promise to us when they hired us, and they’re not upholding their end of the bargain,” she said. “I’m angry about it.”

She’s also angry that her niece – a recent college graduate who has just joined the ranks of the state’s public service workers – isn’t going to get as good a deal as those who came before her. But she understands that state workers could have lost more. KOSE and its allies fought back, preventing even worse changes to their pensions.


Carlos Murillo is a 33-year-old animal services officer for the city of San Jose, Calif., with a wife, two infant sons and their first house, bought last year. So retirement is far from the mind of this member of Local 101 (Council 57).

Yet a change to the city’s pension plan will hurt him now. “It’s going to reduce my paycheck drastically,” says Murillo, whose base pay could shrink by $8,000. That’s because it forces current employees to pay more into their existing pension plan (up to a full 16 percent of their salary by 2014), or switch to a less generous plan that increases the retirement age from 55 to 62 for most public service workers, and limits benefits for new hires.

The economic problems facing cities and counties nationwide are real, says AFSCME Pres. Lee Saunders, “but scapegoating workers who make less than $45,000 a year, and retire after a career of public service with a pension less than $20,000 a year, is not the answer.”

For Murillo (who makes a little more than the national average because of San Jose’s cost of living), the choice is clear. “I can’t picture myself fighting aggressive dogs and jumping fences until I’m 62,” he says. So he’s going to have to contribute more toward his pension – money he desperately needs now.

“With the amount of money I was making even before, it was tight. I didn’t have a lot of money at the end of the week with bills and the mortgage. But with the pension contribution and the pay-cut, there’s no way I’m going to be able to provide for my family. It’s made me consider leaving the city to look for work elsewhere.”

For people like Curtiss, Murillo and Schumacher, attacks on their retirement security are not just rhetorical. They’re real, with serious consequences.

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