For those who work in the private sector the dream of enjoying a comfortable retirement has become just that — a dream.
The impact of the recession continues to be brutal especially on older workers.
“More than seven-in-ten (72 percent) workers over the age of 60 who said they are putting off their retirement are doing so because they can’t afford to retire” according to a recent survey by CareerBuilder. In California with unemployment and under employment totaling over 21 percent — only Michigan with its decaying auto industry is worse off — older people being forced to work longer may regard themselves as lucky just to have a job.
This is not a concern for those who enjoy the job security of working for California government. The highest paid public workers in all 50 states — some of whom are able to retire as many 15 years earlier than the private sector average with pensions nearing full time-pay — continue to be shielded from the impact of our dismal economy by their sponsors in the state Legislature.
Even though the cost to taxpayers for public employee retirement benefits has increased by 2000 percent from $150 million per year to over $3 billion over the last ten years most in Sacramento remain with their heads firmly planted in the sand. And if a $3 billion dollar shortfall does not seem like so much today the future is revealed by a report released by Stanford University that shows California’s public retirement plans are underfunded by $535 billion. That is an estimated liability of about $36000 per household.
Enter State Senator Dennis Hollingsworth with a modest legislative proposal designed to help protect taxpayers while continuing to assure the retirement security of government workers. Hollingsworth’s solution is to put the retirement system on a more actuarially sound basis with changes to the benefits for newly hired workers.
For new hires and new hires only his bill SB 919 would require non-public safety public employees who can currently retire at age 55 with full benefits to work until age 65. It would extend the age for full retirement for public safety workers from 50 to 57 while removing milk inspectors and billboard inspectors from the public safety worker classification. And it would base retirement benefits on the average of the three highest years of pay instead and the single highest year.
Although Hollingsworth does nothing to interfere with the lavish guaranteed pensions for current government workers expect the public employee unions to go “postal” and to lean heavily on client lawmakers who they helped elect to kill any and all pension reform legislation. However the union bosses would be wise to take this deal. They should beware the growing anger of those in the private sector forced to work harder and longer so that public employees can fully retire in comfort while still young enough to start a second career.
The backlash is building and the result could be a much more draconian reform that would make the Hollingsworth plan look like a gift. After all taxpayers are content to see government workers ride off into the sunset to a secure retirement they just don’t want to look up and find themselves carrying them there on their backs.
Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.