Republicans' Next Move: Get Rid of Pensions Altogether
Some states, like Wisconsin, are asking state employees to contribute more to their pension plans, but others are just scrapping them.
The battle over public-sector unions is, at least in part, a battle over benefits: From Wisconsin to New Jersey, public-sector unions are among the last employees who can expect to retire with defined pension plans. Wisconsin, where a political showdown just resulted in reduced bargaining rights for public employees, is expected to release new estimates on state pensions next week, according to The New York Times. The state will likely ask employees to contribute more money to their plans and make other concessions.
But other states have an even more radical proposal: Get rid of pensions, which guarantee benefits, and replace them with 401(k)-type savings-and-investment plans. Earlier this week, Kansas lawmakers held a hearing on a bill to switch state employees hired after 2012 to a 401(k) system -- a move at least six states have already made and that Florida, Oklahoma, North Dakota, and Virginia are also considering. Kansas Republicans praised the bill, arguing that the state's pension system, currently facing a $7.7 billion shortfall, is unaffordable and that public workers don't deserve benefits unavailable to most private-sector employees.