No pension 'fix'
Does anyone really think the state would honor a commitment to make contributions to public employees' individual 401(k)-style retirement accounts?
The state did not honor its commitment to contribute to the existing retirement systems for 14 consecutive years, leaving Pennsylvania's taxpayers on the hook to the tune of $49 billion and putting the financial security of hundreds of thousands of retirees and public employees at risk.
Follow the private sector's lead? The first thing employers cut when their budgets tighten are contributions to employee 401(k) plans, if they even provide such plans.
More than half of all Pennsylvanians working in the private sector have no retirement plans of any kind from their employers. Better than 90 percent who do have employer-sponsored retirement plans are accumulating nowhere near enough to pay basic living expenses in retirement.
These “Republicans” advocating that the state follow the private sector's lead are creating the welfare state they claim to abhor.
Close the existing retirement plans to establish individual retirement accounts for new employees, and taxpayers — all of us — will be on the hook for an additional $42 billion. (This is the conclusion of three nonpartisan, nationally renowned actuarial firms.)
The so-called “pension reform” advocated by Gov. Corbett and his right-wing supporters in the Legislature is not about saving taxpayers money; it is about privatizing investment of public employees' retirement savings and profiting the politicians' Wall Street contributors.
The media would be well advised to investigate the extent to which entities that stand to profit from this privatization attempt are making campaign contributions to Corbett and his allies in the General Assembly.
Barry N. Kelly
The writer is president-elect of the Pennsylvania Association of School Retirees (pasr.org).