A recent editorial in the Palm Beach Post entitled “Push Back on State Pensions” brings to our attention the much-needed reform of state and local pension programs covering public sector employees. Most Americans do not enjoy the richness of the pension plans that our elected officials have passed for their own benefit as well as those that govern public sector employees. The Post calls their editorial a “warning”, and we agree. Not only are funding levels of public sector plans becoming dangerously underfunded because of the poor economy, they are unsustainable for the most part because they deliver on promises made to government employees when wages were low. This is no longer the case, and the differential between private sector and public sector pay and benefits grows larger and larger each day.

Areas of concern from a taxpayers perspective include trying to maintain pension programs that require little or no employee participation in the form of defined contribution plans (based on average salaries rather than years of service) that have been long since abandoned in the private sector. Further, the DROP program instituted by the State creates problems for local authorities on two counts. First, the incentive for government employees to retire early is no longer a valid reason for the plan. It is anticipated that hundreds of thousands of educators and other public service workers will be retiring, many of them early. The cost to replace them and the longer duration of their pension payouts puts a tremendous strain on pension funds. To make matters worse, many of these same employees take a lump sum payment, collect a regular pension and then take jobs in other governmental units. Although this is not illegal, the state should not create an incentive that is self-defeating.

It is clear that in these difficult times that more and more people are postponing their retirement in the private sector because they can not afford to retire. Should they then have to work longer to pay more and more taxes to support government pensions?

We also believe, as the Post points out, that a 0.25 pension contribution by government employees is a small price to pay for the overly generous benefits and pensions that certain segments of the public sector workforce enjoys, such as the Sheriff's Department in Palm Beach County and Fire Fighters in Martin County, many of whom earn over $100,000.00 a year and retire with about 90 percent of it. Some of this is due to the decision by the state not to require that pension plans exclude overtime pay that drives up the cost of pensions throughout government. The Post stated it best when they said “the legislature delivered pension increases for public employees when times were good. It will take political will - and foresight - to unwind these promises now. Consider this a warning if the will isn’t there.”

In summary, the State, with the help of local governments, must take charge of this ever growing problem of unsustainable and unrealistic pensions that 90 percent of the American workforce does not enjoy. Government can and should adopt pension models from the private sector. These models require full time employment up to a normal retirement age, usually 65, and some contributions on the part of the employee and the exclusion of overtime, bonuses, etc. that distorts the true value of a pension and causes undue hardship on taxpayers who have to pay for it. If you agree, we urge that you contact your elected officials and urge them to take action on this critical taxpayers' issue.