For many years, many of us have been told to get a government job at any level and you’ll be set for life. Once you work for the city, county, or even the federal government, you have relative job security that will be followed with a great retirement pension plan.
Most younger adults today have no clue what a pension is because very few employers today offer pension plans. The reason they don’t offer pension plans is that most pension plans become too expensive over time.
A few decades ago, a major employer in the Phoenix area announced that they were shutting down. Not only did it result in the layoffs of several thousand people, but it also eliminated the pensions of all current and future retirees. One man had worked at the plant for 40 years and was only months away from retiring. With the closure of the company, he suddenly found himself not only out of work, but with no pension, something he had paid into for the nearly 40 years. The news interviewed another man who was already retired and I recall him saying it was the only job he ever had after graduating from high school and that he lived off of his pension, but was now frantic as that monthly income was suddenly gone.
I have family and friends who have retired from city or state jobs. Their pensions are very important to them, but according to a recent report, they may find themselves in the same boat as those described above, and I know that for some of them, it will force them to go back to work in their senior years.
“Jonathan Williams of the American Legislative Exchange Council (ALEC) tells OneNewsNow that pension liabilities represent an “existential threat” to states and local governments for the next 20 to 30 years but the issue isn’t getting noticed.”
“‘And if the media doesn’t pay attention to this,’ he warns, ‘state legislators are going to have to take the bull by the horn and draw attention to it themselves’.”
“ALEC releases an annual estimate of unfunded pension obligations in a report called Unaccountable and Unaffordable. The most recent publication shows the numbers are massive — and growing.”
“‘This year, every man, woman, and child in America owes more than $18,000 to pay off the unfunded pension obligations just in state-overseen plans at the 50-state level,’ explains Williams. ‘The number overall is just about $6 trillion that state and local governments owe on these unfunded pension obligations’.”
“He stresses that this is not a red state versus blue state issue, though he contends that conservative states have done a better job of tackling the issue.”
I currently live in northern Kentucky and over the past year, thousands of teachers have descended on the state capital in protest over Gov. Matt Bevins’ attempts to salvage their pension system. He is trying to address the issue, but short of massively increasing state taxes, it’s near impossible to come up with a workable plan that the teachers will accept.
I understand how teachers feel about their pensions, but then as educators, they should be able to understand the economic difficulty of salvaging their pension plan. They don’t want to take anything less and yet they are unwilling to accept any of the comprised plans offered by Bevin. The governor, a Republican, is literally between a rock and hard place with no viable way out. Bevin isn’t alone as virtually every city, county and state will soon be facing the same problem, if they aren’t already.
The opinions expressed by columnists are their own and do not necessarily represent the views of Barb Wire.