A Statement and Prediction

Rhode Island lawmakers heard the following when they gathered for a preliminary shindig related to pensions:

On Tuesday, [pension activist Diane Oakley, executive director of the National Institute on Retirement Security,] gave the lawmakers more reasons to think twice about defined-contribution plans: “If investment losses cannot be recouped by retirement age, they may delay plans or retire with much less income.”

To which the only rational response is: So? As presented, the statement makes no mention of the health or occupation of the potential retiree, and therefore exposes the vacuity of moral statements made about public-sector pensions in broad strokes. If a perfectly healthy 48-year-old first grade teacher has to put off retirement, well, dems da breaks.
That’s the situation the rest of us face, and to treat it as some sort of unlivable state beyond the boundaries of ethics to impose is to reveal what many of us suspect about those inside of government: They truly believe — whether it’s something they’ll allow in their consciousness or not — that they are a chosen people set apart. To the extent that they can leverage political donations and activism to force policies to remain in their favor, they can claim insulation from the realities of our shared economy.
Reading the rest of the article, and having experience with Rhode Island’s governance methodology, one can set the baseline expectation for the coming “reform” as reamortization with some sort of tax increase (perhaps pushed through local governments and property taxes) and a mild reduction in benefit levels for future retirees — such as an additional year or two before they can retire or a couple more years of salary folded into the calculation for benefit amount.
I’d like to be wrong, but I’m just not hearing contrary noises.

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Dan
Dan
10 years ago

“They truly believe — whether it’s something they’ll allow in their consciousness or not — that they are a chosen people set apart.”
This is true in certain “heroic” government circles. The obvious example is the mantra of Firefighter Exceptionalism, where the starting point of any discussion is that there should be one set of rules for everyone else and another set of rules for firefighters to reflect the “unique” nature of their job. Of course, one could argue that any job is unique. I personally think that what the single mother working at Burger King goes through every day is heroic. I’ve tried my hand and I couldn’t keep that up.
There is something different going on in most other areas of government. Whether they’ll admit it or not, a lot of public employees feel useless and unfulfilled because they have no productive work to do when they come in each day. Imagine you are an HR employee who has been filling out form 871-B for the EPA for 30 years and works an average of 1 hour each day – it makes you feel angry and guilty, but there is nothing you can do. The one consolation for this soulless existence is that you earn $112,000 a year at GS-13. You see your supervisor once a year and nobody respects you or what you do. Your health goes and you gain weight, sitting at your desk. The compensation, benefits, and perks become your ONLY measure of self-worth at that point and to lose them would be admitting that your entire life was a waste, half sleeping in a cubicle and staring at a blank screen every day for the only life you get.

Tommy Cranston
Tommy Cranston
10 years ago

“one can set the baseline expectation for the coming “reform” as reamortization with some sort of tax increase (perhaps pushed through local governments and property taxes) and a mild reduction in benefit levels for future retirees — such as an additional year or two before they can retire or a couple more years of salary folded into the calculation for benefit amount.”
Actually, it can’t happen that way since the debt is state and not local. Which is why the maggots are scared, very scared. The GA is going to have to starkly raise taxes in an election year or make very significant cuts.
Hopefully, like the Workers Comp reform, the GA will be forced by circumstances to do the right thing by necessity,, notwithstanding the whines of Lab-Whore.
Whatever happens, it will be worth a bag of popcorn.

Justin Katz
Justin Katz
10 years ago

Tommy,
The state could cut local aid; it could absorb local pension plans in exchange for higher payments from cities and towns; it could even divest itself of the burden of teacher pensions and send that back to local districts. I’m sure there are a range of possibilities, of varying likelihood, that would pass tax increases down the line.
The silver lining is that legislators might need the cover of mandate relief (giving cities and towns the ability to cut costs that have heretofore been required expenditures). That’ll pass the fight down to the local level, too, which is where it belongs… albeit unlikely to be won (from our perspective) until a few years of tax increases have taken their toll.

stuckhereinri
stuckhereinri
10 years ago

“Robert Walsh, executive director of the National Education Association of Rhode Island, said the event reinforced what unions have been saying: that most people would choose a defined-benefit pension plan over a defined contribution 401(k) plan”
Of course everyone (including me) would take a defined-benefit pension over a defined contribution one, the problem is that those types of pensions are way more expensive.
Of course he never mentions how we’re supposed to pay for the defined-benefits, just that he will lobby day and night to keep it.
It will be interesting to see what comes of all this, but I’m not expecting much. In the end the producers will get screwed, just like always.

Tommy Cranston
Tommy Cranston
10 years ago

Yeah Justin, all those horrors (plus some more) are theoretically possible but I can’t see them happening as they would drive our property taxes to number 2-right behind New Jersey. Plus, if there is one thing Governor Dummy and the “progressives” claim to stand for it is “no cuts in local aid”.
Whatever happens it promises to be a very interesting 3-5 weeks!
You are too young to remember how we got effective Workers Comp reform, over the squealing and squirming of Lab-Whore. It wasn’t because the GA suddenly became honest but because the state was collapsing under the old corrupt system and change was dictated to leadership by the business community and the Democrat governor.

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