No quick fix to pension problem
To the Editor:
I was one of those who recently gave testimony to the Senate and House Financial Committee on pension reform, and I must say I was deeply impressed by what I saw and heard.
Being a former teacher, retired since 1967, my voice was a singular one, not heard often throughout the day’s long process, where most were still active in their careers. I arrived at 1 p.m. and waited until 9 p.m. to be heard, for I felt my witness important. I represent one who has been employed both in the public and private sectors.
Whereas one woman representing the small business community stated, “No one in the private sector has these kinds of pensions,” I spoke to my own experience. I left teaching after 30 years with my highest salary at $43,000. Each of those years I paid nine percent towards my pension, set at roughly $32,000. The COLA kicked on after three years.
During that career, I’d been widowed twice (by age 42) and raised my two daughters myself. I sent them both to college, and to effect that I worked many other jobs, fulfilling my Social Security quarters. I could not collect for either deceased husband (married to each under 10 years). However, when I went to collect my earned amount, I was told the Windfall Elimination Provision applied to me; as a result, I could only collect $110 of the $450 a month owed me (remember, I paid in over all those years). The reason? I got a pension.
I then entered the private sector for work. It was there I realized the difference between private versus public sector pay. In my fourth and succeeding years as realtor, I made well over a six-figure salary, an amount from which I could easily bankroll future retirement needs. Then, too, there were the business expenses I could write off: home office, gas, car, utilities, social activity in process of doing business – benefits I never realized in teaching.
My argument speaks to the fact that in teaching, a pension is offered in lieu of much higher salaries in the private sector. It’s one of the trade-offs employees agree to, mandating they pay the amount the state retirement board required (teachers couldn’t opt “not to pay”).
But now, contracts made in supposed good faith by the state with employees are being changed “in the 9th inning,” as one witness so aptly put it.
What did I find so very remarkable on this day of testimony? The caliber of those who spoke. In articulate and prepared manner, each spoke of the devastating effects of a “knee-jerk reaction” to this many-faceted problem. They implored those on the committee to “think outside the box” and consider other proposals.
What are these? Two informed individuals brought their own actuarial plans, one they’d had experts check out. They claimed these “can work,” if given the chance. They hoped the body would at least consider them and not just rubber-stamp what had been placed before them by Ms. Raimondo and her staff.
And I have to say, I was impressed. No histrionics, no table thumping, just cold, hard mathematical facts that deserve serious consideration.
I added my own piece. In the recent past, we were led to believe the supposed experts of the likes of Alan Greenspan were godlike in their understanding of complex fiscal issues, only to discover they had no magic bullet after all.
We all bought into the TARP solution, believing a quick-fix was necessary, only to discover we were shamefully duped as the fat cats recovered and reverted to the same outrageous behavior (instituting usurious banking fees) that precipitated the crisis. I suggest we not repeat that mistake.
What’s called for here? A reasoned, thorough approach to solve a daunting problem. If the pension problem is truly one affecting all, no one group should bear the burden.
This hearing gave me a far deeper understanding of the complexity of this issue, and I can only say to those who will ultimately rule on this crisis, consider the alternatives, the detailed plans you’ve been given by some very talented citizens.
In the end, what have we got to lose by considering those? Probably a repeat of the hasty, costly and ill-advised TARP “solution.”
Colleen Kelly Mellor