We all need to pay attention to what shape public pensions are in. They make it possible for our retirees to live in dignity, instead of poverty. They add $3.5 billion to the state’s economy each year. They are a promise we make to workers for decades of service. They deliver a better benefit at half the cost of 401(k)s.
But your AP article on Minnesota’s pension funds hits the panic button for no apparent reason. The Legislature and Minnesota’s retirement systems constantly monitor the funds. That’s why we made adjustments in 2010, and continue to make adjustments. As a state employee, I now kick in more than I used to – every paycheck. There is no free ride. Every employee pays into the plan; most pay 50 percent and the state pays 50 percent.
Overall, taxpayers contribute only 18 cents for every $1 that’s on a pension check. Two-thirds of the benefits come from investments. As anyone with a mutual fund or CD knows, investment returns and interest rates took a beating in the Great Recession. Losses like that take years to recover.
Patience and a long-term perspective are part of the process. Your article had neither.
Mike Keapproth
Newport
(Michael Keapproth is a correctional officer at Oak Park Heights state prison and a board member of the Minnesota State Retirement System.)
Comments (5)
Add commentToo bad the pension amounts don't change with investment results
My problem with these overly generous pensions is the payout amounts don't seem to vary with investment results. The pension plans keep looking to the government to shore them up when the investment results are down.
Also, please tell me why the private sector has almost totally changed to 401k type of plans if as you say, they are cheaper. There is no way that is true.
All your rules of 80 or 90 keep letting people retire much earlier than those in the private sector. The main reason is the paid health insurance during the early retirement period.
It is time for the government employees to reap the same benefit changes as those that fund their generous retirement deals.
Retirment pensions
I am inclined to agree with orangecatrider. As a recent retiree I have yet to get my first SSA "entitlement". Where I was employed there was no "pension" as they went to 401K with an employer match many years ago. I wasn't too upset as I know that companies and government can drop those pensions if the money runs out. It is pretty costly to pay people to work as well as paying people for not working. I saw the writing on the wall many years ago. That made me responsible for my retirement security. I was upset when I was denied the ability to take a portion of my social security money to invest the way I wanted. I think I could have made some better returns than the government was offering. But as it is now my 401K is at the mercy of the stock market and the fund directors and the economy. So you see most pensioners getting the same amount forever whether the markets fluctuate or not. And if they take a dive they look to government to help them out. Where is the equity in that?
Fair share
Glad to see that some other people see this as an injustice
and unsustainable. The private sector cannot continue
to support the whole public sector and their pensions.
The first step is for the public sector to realize it.
I look forward to John Ward's ideas other than taxing the
private sector.
Doesn't the "fair share" apply here?
Fair Share
I, too, will watch to see what Mr. Ward has to say. As a retired teacher does he recieve a pension that will "live" as long as he lives? These are the things that I find difficult to swallow. But don't think that the private sector will stand for any changes anytime soon. I know that many in the public sector have counted on these never ending "entitlements" just as I will count on my SSA that I paid into for all of my life. But the kicker as I see it is that I had to wait for my full benefit and now have to depend on government to find the compassion to continue to fund it. (wish I could get back all that I paid in!) I don't often if ever hear any threats of what I consider "entitlements" such as pensions, do you?