Governor Jerry Brown has introduced his proposal to modernize the state-employee pension system. I say “modernize” because in principle that’s what we’re talking about here. Anyone who’s held a job in private industry as far back as the mid- 1970s has seen the system evolve from the pension Dad collected back in the day (along with his 25- year commemorative watch) to today’s system complete with 401Ks and their diminishing contributions by employers. No more watch.
The point is, things change. Some say for better, some say not so much. But when it comes to pension reform, the public sector has been slow, indeed snail-like, to adapt. All that was well and good if the market was booming and tax receipts were swelling.
The truth is most of the pension programs that exist today are hugely underfunded. If an employer (public or private) goes bankrupt, that pension would be slashed, and the U.S. taxpayer would be responsible for the payments. That’s not a viable solution for anyone.
It’s time to have the discussion; politicians must say, “It isn’t working – it’s not sustainable.” And employees respond, “How do you propose to fix it?” It can and needs to be fixed. Let’s not waste time hurling invective at one another or playing the blame game. That’s not going to change either the economy or our reality.