This time, the trashing of public employees comes from the News-Herald
From John Curry
http://www.news-herald.com/articles/2010/01/10/opinion/nh1917019.txt
[Willoughby, OH]
Editorial: Avoid more taxes for state pensions Sunday, January 10, 2010
Ohio's five public pension systems have undoubetedly seen better days.
On one front, they need to make up for shortfalls in the money they have to pay for guaranteed benefits for government employees. The State Teachers Retirement System and the Ohio Police & Fire Pension Fund, for example, are currently unable to meet a requirement that they have enough funds to cover pension obligations for 30 years.
The solution that seems to be getting the most attention? Going to the taxpayers for more money — to the tune of about $400 million, according to the Associated Press.
They're asking every type of local government — many of which are already strapped for cash — to contribute more to the pension funds, which would mean more taxes or reduced services in other areas.
On a second front, the rising cost of health care is outpacing the ability of the pension systems to pay for care for retirees — something not required by law but depended on by many.
Ohio's five public pension systems provide health insurance for 375,000 people at a cost of $2.2 billion a year, which they pay for by setting aside a small amount of what the state pays into the systems. However, the State Teachers Retirement System predicts that its health-care fund will run out of money by 2016, with the School Employees Retirement System not far behind.
The pension systems have already placed more of the burden of paying for care onto retirees, and in one instance retirees have seen what they're forced to pay increase by 541 percent over an eight-year period.
Neither of these situations is particularly encouraging.
With regard to health care, the Ohio Retirement Study Council has its work cut out for it and must be diligent in finding a solution. In the grand scheme of things, the high — and rising — cost of health care appears to be the real culprit. But since control of those costs is largely out of the hands of state officials, something must be done through what can be controlled. Setting aside a higher percentage for health care out of what the state already pays into the pensions systems would seem to make sense if not for the fact those systems are already short on money and looking for more.
Regarding those pensions, we must stress that going to taxpayers for more money should be done only as a last resort.
Many of these same taxpayers have seen their own retirement benefits disappear in the private sector, making the thought of paying more for someone else's guaranteed benefits a bitter pill to swallow.
Government pensions for the longest-serving employees top out at 88 percent of their pay, making asking for more money an even harder sell to those worrying about their own retirements or struggling to put food on the table.
Every other option should be explored — including that of converting the state's pension funds into a 401(k)-type system. Understandably, that idea is considered a nonstarter by those who receive defined-benefit plans. But the percentage of private retirement funds that came through defined benefits dropped from 71 percent in 1974 to 24 percent in 2008, illustrating that many others who once paid into the system had to endure the same kind of sacrifice.
http://www.news-herald.com/articles/2010/01/10/opinion/nh1917019.txt
[Willoughby, OH]
Editorial: Avoid more taxes for state pensions Sunday, January 10, 2010
Ohio's five public pension systems have undoubetedly seen better days.
On one front, they need to make up for shortfalls in the money they have to pay for guaranteed benefits for government employees. The State Teachers Retirement System and the Ohio Police & Fire Pension Fund, for example, are currently unable to meet a requirement that they have enough funds to cover pension obligations for 30 years.
The solution that seems to be getting the most attention? Going to the taxpayers for more money — to the tune of about $400 million, according to the Associated Press.
They're asking every type of local government — many of which are already strapped for cash — to contribute more to the pension funds, which would mean more taxes or reduced services in other areas.
On a second front, the rising cost of health care is outpacing the ability of the pension systems to pay for care for retirees — something not required by law but depended on by many.
Ohio's five public pension systems provide health insurance for 375,000 people at a cost of $2.2 billion a year, which they pay for by setting aside a small amount of what the state pays into the systems. However, the State Teachers Retirement System predicts that its health-care fund will run out of money by 2016, with the School Employees Retirement System not far behind.
The pension systems have already placed more of the burden of paying for care onto retirees, and in one instance retirees have seen what they're forced to pay increase by 541 percent over an eight-year period.
Neither of these situations is particularly encouraging.
With regard to health care, the Ohio Retirement Study Council has its work cut out for it and must be diligent in finding a solution. In the grand scheme of things, the high — and rising — cost of health care appears to be the real culprit. But since control of those costs is largely out of the hands of state officials, something must be done through what can be controlled. Setting aside a higher percentage for health care out of what the state already pays into the pensions systems would seem to make sense if not for the fact those systems are already short on money and looking for more.
Regarding those pensions, we must stress that going to taxpayers for more money should be done only as a last resort.
Many of these same taxpayers have seen their own retirement benefits disappear in the private sector, making the thought of paying more for someone else's guaranteed benefits a bitter pill to swallow.
Government pensions for the longest-serving employees top out at 88 percent of their pay, making asking for more money an even harder sell to those worrying about their own retirements or struggling to put food on the table.
Every other option should be explored — including that of converting the state's pension funds into a 401(k)-type system. Understandably, that idea is considered a nonstarter by those who receive defined-benefit plans. But the percentage of private retirement funds that came through defined benefits dropped from 71 percent in 1974 to 24 percent in 2008, illustrating that many others who once paid into the system had to endure the same kind of sacrifice.
posted by Kathie Bracy at 8:38 AM
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