Union-free Virginia not spared state pension woes

Where Wisconsin Gov. Scott Walker (R) wants to take his state, Virginia has already been: It is one of a handful of states that prohibit collective bargaining for public employees in state and local government. Given that, you'd think the state's retirement program would look a lot like those offered by private employers, right? The state has steadfastly maintained a defined benefit plan for the vast majority of its employees, a stable perk increasingly rare in the private sector.

Despite having no unions, Virginia has been one of four states where employees have, for almost 30 years, paid nothing each year toward their retirement. And its union-free status has hardly spared the state pension woes. Gov. Robert F. McDonnell (R) has warned that the plan will become insolvent over time if lawmakers do not address $17.6 billion in unfunded liabilities.

Virginia helps illustrate a reality that complicates the political rhetoric for both sides in the debate over public employee unionization: When it comes to retirement plans, there seems to be little correlation between union membership rates and either the generosity of states as employers or the financial stability of their systems. The reality suggests that, if more states went the way of Virginia and eliminated collective bargaining, it could be that neither union members' worst fears nor many Republicans' best predictions for retirement benefits would come true.

"It was a surprise to me," said Sylvester J. Schieber, former chairman of the Social Security Advisory Board and author of a recent study comparing the generosity of state pension plans. Schieber's work shows that states with few union members are typically no more stingy when it comes to employee retirement than those with many union members, he said.

Schieber's study, which looked at the percentage of an employee's working wages that pension systems are designed to replace in retirement, found that Virginia offers a middling plan - 32 states are more generous, 17 less so. But its plan offers workers nearly the same as that of Maryland, which has a strong union presence. Another recent study, by an economist at North Carolina State University, showed the same thing: Although states with strong unions offered better benefits in the 1970s and early '80s, that advantage had dissipated by 2005.

View the original article here

Citing the pension costs, Costa Mesa, California to almost half its staff

In Costa Mesa, California City of Costa Mesa employees almost half have received layoff notices last week. Street sweepers. Firefighters. Mechanics. Payroll clerks. Animal control workers. In total, about 210 employees and 472 of the city, many of whom have worked there for decades. On Thursday, as the messages to pedestrians, one maintenance worker committed suicide by jumping off the roof of the Town Hall.

"It's like they decided to blow up the city," said Billy folsom, 58, a mechanic who received a pink slip. "It is disastrous." Cutbacks are necessary because of the escalating costs of providing pensions for police, firefighters and other workers unionized, they drain the city's revenues, mayors say. Within three years, and projections show that more than one of every five tax dollars spent on employee retirement benefits, which were much more generous in the years before the stock market crashed in 2008.

"Just do the math-that is not sustainable," said Jim Righeimer, a recently elected city mayor pro tem. He campaigned on a pension, raising anger, counter-campaign from the city's firefighters and police. "Under these sorts of everyone, we can't do everything that needs to be done."

Public pension fight

The financial follies of the past boom-by banks that lent too easy by purchasers who bought the places they couldn't afford, by consumers who won't save-recession became clear shortly after. But many States and cities might have overextended themselves as well as their risks they undertook now play in public pension shortfalls raise political battles across the country.

GOP efforts to return benefits of public employee bargaining rights, have triggered mass demonstrations in places like Wisconsin, Indiana and Ohio. But the Conservatives take control of Costa Mesa, city politics, in an assault against a public servant compensation has gone even further. During the boom, many State and local governments promised their employees better pensions. Some employees were allowed to retire earlier. Others were given more of their final salary. Economically, it was easy to do; The stock market was soaring, raising pension fund balances.

Between 1998 and 2008, the last year for which figures are available, the total pension payments by State Governments and local authorities has increased twice as fast as in the previous month, according to the Census Bureau.

But now that the recession has led to steep pension funds, these promises employees past and present may be much harder to keep. Dozens of State and local pension funds across the country are now considered very seriously. 2009, approximately 58 percent of State and local pension funds had less than 80 percent funded, testing the soundness of pension, according to the retirement Research Center at Boston College.

Shortfalls have far-reaching political implications. Already, several politicians who oppose ideologically the public unions have attributed their problems of greed and political influence. Now these unions members are on defense.

View the original article here

Virginia Union State pension not spared no trouble

Richmond-where Wisconsin Gov. Scott Walker (R) wants to take the State, Virginia is one of a handful of countries: already did not prevent public employees collective bargaining at the State and local government. Given that, you'd think the nation's retirement program may look like a lot of those offered by private employers, right? It would be a mistake. The country kept firmly defined benefit plan for the benefit of its employees, the vast majority of stable and increasingly rare in the private sector.

Although there are no unions, Virginia has been one of four situations where employees for nearly 30 years, paid nothing each year toward their retirement. And its troubles are hardly spared no EU country's pension. Gov't., Robert f. McDonnell (R) has warned that the program will become insolvent over time if lawmakers do not take care of 17.6 billion in unfunded commitments. Virginia helps illustrate that reality complicates political rhetoric for both sides in the debate about public employee unionization: when it comes to retirement plans, there seems to be little correlation between generous rates of Union membership countries such as employers or financial stability of their systems.

The reality is that, if more countries followed Virginia eliminated collective bargaining, it could be the worst fears of many Republican members of the Association and not the best predictions for retirement benefits will come true. "It was a surprise to me," said Sylvester j. Schieber, former Chairman of the Social Security Advisory Board of the author of a recent study comparing the State's generous pension.

Schieber's study shows that States with some Union members are typically not more stingy when it comes to employee retirement than those with many Union members, he said. Schieber's study, which looked at the percentage of an employee's salary that pension systems are designed to replace retirement, found that Virginia has a program lmkodsht-32 countries are more generous, 17. But his plan offers working almost the same as that of Maryland, has a strong presence.

Another recent study, by economist at North Carolina State University, showed the same thing: Although the United States with strong unions offered better benefits in the 1970s, ' 80s, and that's the advantage of the fog in 2005.

View the original article here