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February 28, 2013 at 6:00 AM
In Olympia, more proposed pension creep
While proposals are floated in the Washington State Senate to create defined-contribution retirement plans for public employees–proposals endorsed by The Times– lobbying was also going on in the House of Representatives to move certain groups of public employees into traditional pension plans with higher benefits.
You can listen to the testimony here, which was given Feb. 26 at the House Appropriations Committee. Most of it is from people whose benefits stand to go up, or whose clients’ benefits stand to go up. They like the proposals. Probably they originated them. And they make the usual argument: Some other group has a benefit; I am similar to that other group; therefore I should have the benefit. Some of them make a compelling case. An employee of Western State Hospital talks about being attacked without warning, and suffering a crushed foot. What makes him so different from a prison guard in terms of the retirement he should have?
The prison guards’ pension plan is PSERS, the Public Safety Employees Retirement System. It’s a small plan, created in 2004 for employees who didn’t qualify for the most generous plan, the Law Enforcement Officers and Fire Fighters (LEOFF) plan. But PSERS is richer than the big state defined-benefit plan, Public Employees Retirement System 2 (PERS-2). In PERS, normal retirement is at 65; in PSERS it’s at 60. PSERS has higher disability benefits than PERS and allows early retirement at 53 instead of 55.
“Jobs like mine should be given an early retirement age,” says a 29-year-old worker at Western State Hospital. Well, maybe—but there isn’t enough information at this hearing to really judge.
Two bills have been offered, both of them by Rep. Timm Ormsby, D-Spokane. Ormsby is a union man, the immediate past president of Local 72 of the Operative Plasterers and Cement Masons. He is helping other union brothers.
Ormsby’s House Bill 1923 would open PSERS to employees of the Department of Social and Health Services involved in direct care, custody or safety work. Ormsby’s H.B. 1929 would open PSERS to public utility district line crews. The PUD association testified against it, as did the state’s biggest PUD, Snohomish County PUD, because it would cost ratepayers more money.
Are these upgrades justified? I don’t know. Maybe some of them are. But they come at a time when state budgets are tight, when pensions have been a troublesome budget item, and when serious proposals are floated to transition away from defined benefit plans, ultimately to get rid of them altogether. These bills build up such plans. They entice the public agencies to promise employees greater future benefits. And as we keep being reminded, once any public employer makes a pension promise to an employee, taxpayers are stuck with it.
Ormsby has yet another pension bill, H.B. 1913. It would raise retirement benefits of custodians, food service workers and others covered by the School Employees Retirement System (SERS). Someone earning a benefit of $30,000 a year under the current system would get about $31,500 a year.
And so it goes.