STRS stakeholders' worst fears (mandatory defined contributions retirements) are being seriously discussed in Kansas!
From RH Jones, October 15, 2009
To all:
The problem with public employee Defined Contribution (401K) type pension plans, as opposed to our Defined Benefit (DB) plan is that the 401K is not guaranteed. And, if all new hires have to pay into the 401K, rather than the DB, this means that: Since no new hires would be paying into the fund, the current retired members are left stranded until the DB runs out of funds, and consequently expires -- perhaps before we do; also, if you are already retired under a 401K, there could never be funds for a COLA, 13th check, or any other "catch up" to inflation benefits; and, being retired, if there is an economic downturn, you also lose. Only the extreme far-right politicians gain treasure from the private for profit companies offering the for their profit 401K pension plans
All public employees lose; therefore, nationwide, we need to join hands, in union, to defeat any politician who would back such a heartless plan. Let the extremist far-right stand in front of ninety tough city eight graders for "study" hall at the last period of the day like I did, and try to get them to study; Or to be the Police/fire and Highway Patrol that risk their lives every second of their duties; Or to be the Public Nurse who has to go into the worst neighborhoods to tend to the sick; Or the highway worker who works out in traffic breathing vehicular fumes when it is 90 F, while the pavement is boiling; Or the public building janitor that works to remove filth, while breathing harmful dust, and asbestos particles. Together, we can defeat the hard headed extremists who think that public employees are timid and would fold at the least little threat. Au contraire, we will not yield. We will vote you out of office. And our jails are beginning to fill with those moneyed extremists who are wrecking retirement system investments. In this information age, the dishonest can no longer get away with it. And that is a fact, not my opinion,
RHJones, retired STRS teacher member
Economist, panel's chairman push 401(k)-style pensions for Kansas teachers, government workers
TOPEKA, KAN. — A university economist and a key legislator who wants Kansas to have 401(k)-style pensions for its new teachers and government workers said Tuesday that such a plan can be started quickly.
The economist, Art Hall, told the House Appropriations Committee that starting such a plan would lessen long-term funding problems for the Kansas Public Employees Retirement System. Committee Chairman Kevin Yoder backs the idea.
"I think there are a lot of legislators interested," said Yoder, an Overland Park Republican.
Hall is executive director of the Center for Applied Economics at the University of Kansas, which raised eyebrows across state government with a recent report describing KPERS as "bankrupt." Several committee Democrats took him to task for the description, saying it unnecessarily frightened some seniors.
Hall acknowledged — as KPERS officials have said — that current retirees' pensions aren't in danger in the near-term. But at the end of last year, KPERS projected the gap between its income and expenses over the next 25 years at $8.3 billion.
He told the committee the state faces pouring increasing amounts of money into KPERS unless it moves away from guaranteeing teachers and government workers benefits, based on their years of service and salaries.
Hall also noted that the state's higher education system has its own 401(k)-style plan, which could be expanded or copied under KPERS management.
"The state already has the infrastructure necessary," Hall said. "You simply have to decide to do it."
But Gov. Mark Parkinson has expressed skepticism, and many fellow Democrats in the Legislature oppose it, as do public employee unions. They note that 401(k)-style plans put the financial risk on employees, whose projected benefits fluctuate with the financial markets — a point driven home when the economy slumped last year.
"I have a lot of people — friends, associates — who say, 'Hey, I'm going to have to work another 10 years,'" said Rep. Bill Feuerborn, of Garnett, the committee's ranking Democrat.
Officials believe the state legally can't force current KPERS members to switch to a 401(k)-style plan. But Hall said having new workers join such a plan would eliminate future liabilities for the state — and free up resources to deal with the problems facing the existing system.
Eventually, all teachers and workers would have 401(k)-style plans and, Hall said, future legislators "really won't have much an issue to deal with."
As for describing KPERS as "bankrupt," Hall noted that the center's report was assessing the pension system's long-term finances and noting it wouldn't be able to meet all of its obligations over time. Hall said he ran softer language by colleagues, who questioned whether it was clear.
"I'm terribly sorry if I frightened any widow or other elderly person, but technically, we are absolutely correct," Hall said.
Feuerborn replied: "Maybe you should have gone to a nursing home and ran that word by them."
posted by Kathie Bracy at 5:14 PM
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