Pension Pomposity

Five years ago, every legislative office was besieged with correspondence, mostly from retired teachers, urging the Legislature to pass a Bill, which effectively increased TPAF and PERS pension by 9%.

I reflexively recoil from the idea of spending taxpayer money on gifts. Clearly, neither the retirees, nor then-working employees, had either contributed a nickel toward increased benefits, or relied upon same when considering retirement. I engaged in some rather spirited debate with the advocates of the proposal, ultimately deciding that if the people who administer the pension funds advised that the Funds were solvent enough to permit that benefit increase, I would support it. Much to my surprise, the PRB supported the proposal and, true to my word, I voted for the increase. I believe that only one lonely soul – Rick Merkt– voted no.

And he’s been proven correct; I’ve been proven wrong.

In my own defense, I considered the pension funds as akin to a collective 401(k). If – as the pros who ran the fund advised – the fund had excess assets, the purpose of the fund was to benefit retirees, and they should receive the windfall. That taxpayers, remember, were already benefitting, contributions to the "over-funded" pensions having been suspended.

But I should have known better. A political saw runs something along the lines of, "It is less blessed to give than to not taketh away". Having extended that gift, I should have realized that it would be impossible to repeal, if times changed. They have, and it is.

You may have noticed that the pension funds are no longer flush. You may have heard that the taxpayers are being asked to pony up something like $1.2 billion this year alone to put them back on a sound footing. If you were a teacher or a municipal employee, you heard about a proposal to repeal that pension gift, introduced by Senator Kavanaugh.

And you were shocked – SHOCKED – that anyone might consider asking you to give back a benefit you didn’t pay for and didn’t earn.

Being afflicted with a terminal case of honesty, lacking a "politic" personality (one Livingston teacher, outraged that I suggested that the taxpayers should not foot the whole bill, called me "pompous"; I leave that judgment to a candid audience.), and liking debate, I willingly engage the spenders. With interesting results.

Let’s be clear: the additional 9% was a GIFT. No one worked for years anticipating that benefit; they expected the lower benefit established by statute. And that benefit is wholly unknown in the private sector. If, once, teachers might have laid claim to being underpaid, such has not been the case since Tom Kean’s Governorship (when the salary for a starting teacher matched or exceeded that for a starting lawyer working for a Superior Court Judge).

But even if that were the case, the taxpayers are staring down the barrel of a $30 billion pension deficit. To which, every single public employee who has written to me so far has replied, in effect, "get the money from somewhere to keep my (unearned) benefits rolling in."

Now, it speaks no ill of hardworking, dedicated governmental employees to firmly state: you are not entitled to benefits you did not earn, and if the assumptions underlying the gift to you prove to be wrong, you, not the taxpayers, should make the sacrifice.

But, as above, just TRY taking something back, even when it was not earned.

Many folks complain that they’ve come to depend upon the increased benefits. They have my sympathy, and I do not mean that facetiously. No one can absorb a 9% cut in the amount to which they have grown accustomed without enduring some pain.

But it’s not a choice between higher benefits, duly earned, paid for from investments, and a stingy refusal to pay public employees what they’re worth. The choices are (a) pay the higher benefits, and see the plan go bankrupt, shafting future retirees (which, of course, will never happen); (b) a modest cuts in benefits, back to the level the employees expected before the Legislative gift; or (c) a massive subsidy from the already overburdened taxpayers.

Given that only (b) and (c) are realistic, I favor (b). If favoring the taxpayers makes me "pompous", to such charge I plead unabashedly guilty.

And to Rick Merkt: YOU WERE RIGHT!