States scaling back worker pensions to save money
Published May 01, 2012
BATON ROUGE, La. - Neil Carpenter took a pay cut when
he accepted a job as a Louisiana state accountant more
than 12 years ago, but he figured he would make up for
the loss with a retirement check that would guarantee
long-term financial security for him and his family.
Now the 41-year-old finds his life plan teetering as
Republican Gov. Bobby Jindal seeks to restructure the
pension system for rank-and-file workers, potentially
requiring higher employee contributions and delaying
the retirement plans of employees like Carpenter.
"Do you really want to breach a contract with the
employees who have committed a long part of their lives
to the state of Louisiana?" Carpenter asked state
For years, state governments lured workers with the
promise of lucrative pensions that provide nearly the
pay that employees earned on the job. But after years
of budget crunches, nearly every state has revamped
public retirement benefits in an effort to shrink the
long-term obligations that are billions of dollars
short of what is needed to cover benefits.
The moves have triggered a legal and political battle
over whether states are reneging on their promises to
millions of public-sector workers. The National
Conference of State Legislatures reports that since
2009, 43 states have boosted the slice of money workers
must pay toward their own retirement, changed the age
when a retiree can get benefits or modified their
pension plans in other ways.
"In most cases, the changes affect only people hired
after the legislation was passed. In a few plans, the
changes apply to non-vested members as well," said Ron
Snell, a public employee pension expert with the
National Conference of State Legislatures.
Governors as ideologically apart as the conservative
Jindal and California Democrat Jerry Brown are facing
intense opposition from labor groups, workers and even
members of their own parties as they try to change
pension rules. And some battles have shifted to the
courts, because most states have some sort of legal
protection for public pensions.
Read more: http://www.foxnews.com/us/2012/05/01/states-scaling-back-worker-pensions-to-save-money/#ixzz1tdAXGUmu
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