Smart Thinking
Washington State Debates Innovative Pension Reform
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  • Anthony

    Public pensions aren’t simply a gift from taxpayers; they are contractually considered an integral part of total compensation agreement, along with salary, health benefits, vacation, etc. Beyond that, Washington State proposal is indicative of altering perspective and not ignoring what is absent and in that regard adds to fiscal public policy considerations (especially since pensions consume a growing share of state and local budgets).

    • Corlyss

      Spot on. Pensions are a contract term part of employment contract packages. That makes them different in kind from gifts and entitlements, at least as the latter were traditionally legally considered. It wasn’t until 15 or so years ago that I started hearing legislators and liberals refer to pensions as “entitlements.” Sent a cold chill down my spine, I can tell you. I suppose their justification for doing so is the fact that employee and employer contribuions that comprise the pension benefit are exhausted quickly in the first few years of a retiree’s life, and the rest has not been paid for by either.

      • Anthony

        Watch those cold chills down spine – not healthy.

        • TommyTwo

          Be careful with that humor; I started wondering if it was the other Anthony! 🙂

          • Anthony

            10-4

    • Jim__L

      What can’t continue, must stop.

      Making promises you can’t keep is a bad habit of the Blue model. It leads to broken promises.

      • Anthony

        I don’t categorize blue or red model but WRM actually labels it Fordist.

      • Corlyss

        I agree with Anthony. This is not a Dem or Rep. problem. It’s a politicians’ problem. Frankly, when they haven’t done their own screw-uppy give away programs, the Reps. have presented themselves as Dem-Lite or they log-roll, or they “go along to get along,” or, worse, they see the value of giving people what they think they want in order to appear sympathetic. The voters really do not recognize or grasp the extent of their culpability in the general mess. They want to blame the other party, or the nature of politics, but they ain’t thinking about their responsibility like they would be thinking about it if they caused a car accident.

        • Jim__L

          I don’t tend to use the term “Blue Model” in a partisan way; it refers to Statism in general (and reckless spending specifically), no matter who’s running it.

          • Corlyss

            I take your point, but that’s a unique view of the Blue Model. It’s Democratic because they are the premier Statist party. Republican Statists need to be purged from the party. Send ’em where they belong, i.e., into the Dem party.

  • free_agent

    You write “a group of state legislators is taking steps toward a defined-benefit pension plan for public workers”. That should be “defined-CONTRIBUTION”.

  • free_agent

    A large difference between a defined-benefit plan and a defined-contribution plan is that a lot more financial risk is put on the worker with a defined-contribution plan. (Assuming that regulation is applied to ensure the plan itself is stable.) That risk has some market value, a price at which workers would be willing to take on the risk. Does anyone know what that price actually is? (Does the market price of annuities tell us the answer?)

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