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article imageOp-Ed: Congress should adjust federal spending and give pension bailouts

By Calvin Wolf     Dec 10, 2014 in Politics
Pensions are in trouble in the United States, and Congress is poised to pass a spending bill allowing a reduction in pension benefits for millions of workers. This is outrageous.
The massive spending bill set to pass through Congress and keep the U.S. government running includes a nasty surprise, explains the Washington Post. Part of the spending bill, as detailed by CNN, would allow the reduction in pension benefits to recipients of multi-employer pension plans, which is a grand total of 10.5 million Americans. Fortunately, most multi-employer pension plans are still healthy...but up to 1.5 million citizens under some 200 struggling pension plans could see a real reduction in benefits.
This reduction in benefits is intended to prevent the federal insurance for these multi-employer pension plans from collapsing.
Obviously, many people are outraged, and rightly so. The government should provide a bailout for these pension plans because those who are harmed by the reductions, the retirees themselves, did nothing wrong. Why should General Motors and mortgage giants receive federal bailouts while retirees suffer through benefit cuts?
As a public sector employee who is working toward a pension, I am appalled that this would create a precedent that could cripple my retirement after years of service. I am a high school teacher in Texas, paying into the state's Teacher Retirement System. Already, pension reform has occurred since I started the job, replacing the "rule of 80," meaning you could earn a full retirement when you age plus your years of teaching equaled 80, with a fixed retirement age of 62. Instead of getting benefits at 54, I must put in an extra eight years. Luckily, it is still a full retirement, which is far better than some people will be getting under Congress' spending bill.
Pensions are often high on the list of what attracts workers to various jobs. Many productive employees intentionally choose jobs that offer pensions because they value a secure retirement. Removing these fixed benefits is not only immoral and unethical, violating years (or even decades) of agreement, both written and implied, between worker and employer, but it will harm industries that still offer pensions by frightening away prospective employees. Many public sector employers, such as the city of Detroit, may face an intense shortage of workers if Congress allows pensions to be "restructured" to provide fewer benefits.
Many public sector workers sacrifice bonuses and stock options in exchange for a guaranteed retirement. Take this away and the most productive public sector workers, those who can easily excel in the private sector, will switch careers. Congress should consider this before allowing pension benefits to be adjusted for retirees. Allowing pension promises to go dishonored could crippled the public sector's ability to recruit high-quality employees. Ultimately, the benefits of preventing this by bailing out multi-employer pension plans are well worth the costs.
A moderate amount of money now in exchange for keeping public sector employers competitive in recruiting skilled workers is a good investment. With all the billions we waste on excessive defense spending and higher education subsidies, we could fully fund all ailing pension plans in the country with ease.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of DigitalJournal.com
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