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The Problem With Pensions
December 25th, 2005

With the end to the transit strike, an editorial in the New York Times expresses the hope that an issue “of growing concern all across America” will now be addressed “in a calm and rational way” — the problem with pensions . Pensions “are increasingly at risk and increasingly self-funded” in the private sector, and they are (as Steven Greenhouse pointed out in a news article in the Times yesterday Transit Strike Reflects Nationwide Pension Woes) “a problem confronting cities, counties and states nationwide, causing many budgetary experts to predict a wave of painful fights over efforts to scale back government retirement programs.”

The Metropolitan Transportation Authority, in “shaky financial shape,” can no longer ignore “the long-term costs of benefits that Americans long took for granted,” today’s editorial says.

“No one is suggesting that transit workers be denied the pensions they’ve earned. But if they won’t contribute more to finance them, then the unions will have to help to make up the difference in some other way — through increased productivity, or through greater worker contributions to the union’s generous health care benefits, which the workers now get for free. ”

By on December 25, 2005, 12:00 pm
In category: Public Finance,Transportation | 1 Comment »

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One Response to “The Problem With Pensions”

  1. Larry Littlefield Says:
    December 26th, 2005 at 10:36 am

    The problem with pensions is that they can be scammed.

    In the 1990s state and local governments cut contributions, and increased benefits, claiming zero cost because a stock market rising 20 percent per year would pay for everything. The politicians became very popular.

    At the same time, CEOs cut contributions to pension funds, booked “profits,” awarded each other stock options while sitting on each other’s boards, and retired.

    Two kinds of people are getting richer — top executives and retired public employees. Everyone else is getting poorer. Throw in rising debts, and you see a generational war, with one side doing all the killing because the deaths are deferred, and the dying are not paying attention.

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