Pensions crucial for public employees

March 06, 2010

I am writing in response to Ron Smith's recent column, "Showdown over public employee benefits looming" (Feb. 26) and other misguided opinion pieces that have recently appeared in your newspaper.

In his column, Mr. Smith attempts to make a point against public employees by saying, "The average federal worker's salary is a lot higher than the average private-sector worker's (about $30,000 more, according to USA Today)" and that government workers also have far more generous retirement and health benefits.

Here in the state of Maryland, Mr. Smith may be surprised to know, state employees who take care of foster children, keep Marylanders safe, help those in need of mental health and other health care services, are grossly underpaid, have extremely high turnover rates and are coping with unprecedented and dangerous understaffing. Pension benefits help somewhat to make up for the lower pay and increasing demands of these public service positions.

In the Maryland Department of Juvenile Services for example, 36 percent of employees leave within 12 months of employment. In the Social Services Child Welfare Division, the state has yet to meet staffing standards set in 1998. One third of Parole and Probation agents hired since May, 2002 have already left state service, and each replacement costs $5,000 to train. These are people critical to protecting our neighborhoods.

Mr. Smith also asserts that, "Public employees, such as teachers, enjoy defined benefit pension plans, ones that promise specific payments to a retiree, usually tied to a percentage of that person's final salary. Because of mounting costs, defined pension plans have become a rarity in the private sector over the last couple of decades."

In fact, while the media often focuses on the handful of public employees who receive inflated retirement benefits (although usually nothing compared to extreme private sector bonuses and retirement packages), those examples are exceptions. The average pension for a retired public employee in the U.S. is about $20,000. The biggest mistake for policymakers would be to cut benefits for all retirees in response to news stories about a few outliers.

Further, according to the National Institute on Retirement Security (NIRS), each dollar in taxpayer contributions to Maryland's state and local pension plans ultimately supports $6 in total economic activity in the state. This reflects the fact that investment returns provide the bulk of financing for the retirement benefits that in turn provide income and jobs for others in the state. NIRS estimates that retiree expenditures stemming from state and local pension plan benefits support over 21,000 jobs in the state. ("Pensionomics: Measuring the Economic Impact of State and Local Pension Plans," National Institute on Retirement Security, February 2009.)

Over the last several years we have seen a sharp decline in the savings among the middle and working class in America as their 401-k accounts were brutalized by irresponsible players on Wall Street. The private sector has put the burden on the public while they took guaranteed pensions away from their employees and forced them into 401-k programs that are subjected to the bandits on Wall Street, leaving the taxpayers to clean up the mess.

Our state employees deserve better from the likes of Mr. Smith. They deserve to receive the pensions they have contributed to and earned, without having to constantly fight for them and continually justify them. Let's save that for Wall Street bandits.

Patrick Moran, Annapolis

The writer is director of the American Federation of State, County and Municipal Employees Maryland.

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