VOTE NO ON PENSION REFORM on 2014 election ballot. The so-called Phoenix Pension Reform Act – funded and pushed to the ballot by out-of-state dark money and by shadow groups like the “Arizona Free Enterprise Club” – may well qualify for the city election ballot later this year. The backers of this measure used paid circulators to gather more than 54,000 signatures, or about twice the 25,480 verified signatures needed to put the issue on the ballot. The measure claims to do two things: One, “end the illegal practice of pension spiking,” and two, “transition new city employees into a more sustainable and fair 401(k) style-defined contribution plan.” The Tea Party aligned supporters of the initiative say this would “fix Phoenix’s broken pension system” and “protect taxpayers from ballooning pension costs.” That is absolutely not true – a point that we must make early and often if we’re to defeat this measure on Election Day. This has been pulled before with disasterous results in those states. Get informed before voting yes on this initiative. Michigan: Michigan began enrolling all new state employees in a 401(k)- type plan in 1997. Since then, the system’s unfunded liabilities have skyrocketed, from $697 million in 1997 to $4.078 billion in 2010. This increase partly reflects inadequate employer contributions to pay for the unfunded liability. •Alaska: Alaska adopted a 401(k)-type plan for both new state and public school employees that became effective in 2006. Although sold as a way to reduce the employer contribution rates, these rates have increased. Across the two plans, the unfunded liabilities associated with the closed defined benefit plan have increased from $3.8 billion in 2006 to$ 7 billion in 2011 (the latest year for which data are available). •West Virginia: West Virginia adopted a 401(k)-type plan in 1991, but reversed course in 2006, reopening its defined benefit plan to all new hires in 2005 and allowing the members of the 401(k)-type plan to switch into the defined benefit plan. There were several reasons cited for the switch back, including a study done by West Virginia’s Consolidated Public Retirement Board, which found that the individual account balances in the 401(k)-type plan were not on track to generate adequate retirement income for public employees and that public employees would have such low incomes in retirement that they would be eligible for means-tested public programs, driving up costs to the state.
Posted on: Fri, 08 Aug 2014 17:46:34 +0000
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