The Governor would create a new pension tier – Tier 6 – for state workers and other public employees with dramatically reduced benefits and increased employee costs. Cloaked in the guise of reform, this proposal is about politics and placating big business special interests, not sound public policy. This bill ignores the landmark Tier 5 pension reform enacted by the legislature less than two years ago which is estimated to save the state and local governments $35 billion over 30 years. We don’t need a new tier to cut costs, just let Tier 5 work as intended!
The Governor’s plan would result in much smaller pensions and a loss of security for workers. It is a first step toward ending secure pensions entirely by introducing a 401K plan that is presented as “optional”, but also cutting pension benefits to the point where a traditional pension is no longer a good option. For most state workers this bill would double the amount that they are required to have taken out of their paychecks. And this tax on workers paychecks could go even higher due to a variable rate formula in the bill. If this formula was in effect today, many state workers would be required to contribute more than 10% of their salary to the pension fund.
Despite press reports to the contrary, public employee pensions are not overly generous. The average benefit for a member of the state and local employee retirement system is $19,151. Pensions are not a gift or a special privilege. They are earned by many years of hard work. The pension system is a long term commitment that must not be abandoned for political gain.