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The Republican sweep of many statehouses in the November election is expected to lead to renewed, fierce attacks on public-worker pensions.
Assaults on public-worker pensions have often been strongest in GOP-controlled states, although efforts to undermine retirement security have also happened under the watch of Democrats.
“In virtually every state, there is some level of threat,” said Hank Kim, the executive director of the National Conference on Public Employee Retirement Systems.
The expected new wave of attacks comes at a time when far fewer U.S. workers have retirement security than in the past.
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The shift away from pensions spells a pending financial disaster for the nation’s elderly, studies suggest.
Poverty is nine times greater in households of retirement-age people without pension income, according to a 2010 study by the National Institute on Retirement Security. Looked at another way, pension income kept 4.7 million households from falling into poverty or near poverty, the report found.
At this rate, half of all U.S. households won’t be able to maintain their standard of living in retirement, according to the Center for Retirement Research at Boston College.
UFT Treasurer Mel Aaronson, a national expert on public pensions, said the attack on retirement security amounts to a shameful betrayal of working people.
“Everyone deserves dignity in their old age,” said Aaronson, who is the president of the National Conference on Public Employee Retirement Systems and the board chairman of the New York City Teachers’ Retirement System. “It’s disgraceful that in the richest country in the world anyone should work for an entire life only to retire in poverty.”
Nowhere has the attack on public pensions been more vicious than in Oklahoma and Alaska, where earlier this year and in 2006, respectively, Republican-controlled state legislatures voted to close their states’ public employee defined-benefit pension plans and replace them with a defined-contribution plan.
In Oklahoma, the teachers’ retirement system may be the next target, said Kim.
Dangers also lie ahead in Florida, where Republican Gov. Rick Scott was narrowly re-elected and legislation has been introduced every year for the last three years to freeze the statewide public employee pension system.
Closer to home, New Jersey Gov. Chris Christie has reneged on earlier promises to meet the state’s required contributions to its public-sector pensions and has instead appointed a task force that Kim expects will recommend converting the pensions into 401(k)-style defined-contribution plans.
Some Democrats are getting in on the action. In Rhode Island, voters elected Democrat Gina Raimundo, who ran on a “pension reform” platform. As the state’s treasurer, she was instrumental in freezing pension benefits for in-service public employees and reducing them for retirees. More cuts may lie ahead.
Experts say the attack on pensions is linked to the larger war on unions over the last 30 years. Public-sector workers are far more likely to have pensions than those in the private sector because more of them are unionized. Overall, 82 percent of union members have defined-benefit plans compared with just 21 percent of nonunion workers.
The precipitous drop in the number of private-sector workers with pensions began in 1979 when the corporate assault on labor took off.
As private-sector workers have lost their retirement security, some have come to resent those in the public sector who still have pensions, a phenomenon that Aaronson calls “pension envy.”
“Opponents of unions and pensions have pitted public- and private-sector workers against each other,” Aaronson said. “They tell the private-sector workers, ‘Look at what those guys have. That’s your tax money paying for their retirement.’ But in fact it’s deferred wages. We earned our pensions.”
The answer, Aaronson said, is for unions to fight for all workers — not just members — to have pensions. “That way we can’t be divided,” he said.
To this end, efforts are underway in states across the country to win legislation that would allow private-sector employers to participate in public-sector retirement systems.
“It’s our responsibility as a labor movement to improve the lives of working people,” Aaronson said. “Fighting for pensions is one of the best ways we can do that.”