Conservatives are wringing their hands over this nation’s “pension problems.” A number of state governments (including my new home state of Illinois) show massive shortfalls in their pension “pots.” Part of the solution, they say, is to move away from defined benefit to defined contribution pension plans.
For those of you not fully versed in pension terminology, a “defined benefit plan” is one that from the get go says that if you meet your obligations and your employer does too, then you will get a clearly defined amount of money each month. A “defined contribution” plan says that you will contribute what you contribute and if your employer does or does not, you will only get what your contributions are worth when you retire.
The pension I have from the California State Teacher’s Retirement System is a defined benefit plan. I fulfilled my commitments as did my employers and my plan is good for the next 25-35 years according to the plan’s overseers. So, there is nothing wrong with these kinds of programs. They work quite nicely, thank you.
Here’s the difference. If the employer reneges on their contributions, which the State of Illinois has done, then either plan falls into deficit. If that happens and you have a defined benefit plan, then the problem sits in the lap of the benefactor, which is the State of Illinois. If you have a defined contribution plan, the problem is, well, yours. Too bad. You can sue if you like, but lots of luck with that.
Can you see why conservatives want the switch? It is all about who pays.
Can you see why conservatives want the switch? In Illinois, there will be increasing pressures on businesses to pay their fair share of taxes (currently they do not, along with virtually all of the other businesses in the country).
Can you see why conservatives want the switch? While corporations are raking in corporate welfare or, like Wal-Mart, passing off their employee’s healthcare costs (Medicaid) and housing costs (Section 8) and food costs (SNAP or “food stamps”) to you and me, they want the rest of the 99% to pay for the malfeasance of the politicians they have bought to do their bidding and not the business of the people.
Can you see why conservatives want the switch? Public service jobs don’t pay all that well. Part of the dance has always been, that the employer will sweeten the pot with better benefits, so security was offered for later instead of cash now. But that was then and this is now. Too bad, you lose. Wall Street takes down the economy with reckless wagers with money not their own and then they expect the “little people,” the “99 percent” to make up the shortfall.
Now, an argument can be made that as the population of the country gets older, fewer people of working age are supporting more retired people, but that is not what this discussion is about. What we are talking about here is malfeasance. If the pension plan provider were a private company, they would just go bankrupt (voiding their pension agreements and throwing their obligations onto the federal government), but governments can’t do that. (Or can they? If Detroit pulls it off, will Illinois be next?) How about we take a couple of hundred billion dollars from the Pentagon’s budget and fix this problem? They don’t need it. Congress keeps shoveling money at the military they haven’t even asked for because our representatives have taken bribes, er, campaign contributions, from military contractors.
And why the fuck do we let our representatives take money from people doing business with the federal government? If that were a private transaction, people would be going to jail.