I apologize to my readers on the recent hiatus as there has been a lot of living put into the month of June.
Last week I spent two nights in our new home, then was whisked off to Chicago for CAPP training. This training was done to learn more about public pension plan funding, and initiatives to destroy defined benefit programs as we know them. Defined benefit programs became popular in the late 19th and early 20th centuries as a means to guarantee retirement for employees. However, in 1974 Congress passed a series of laws which allowed private employers to move employees from defined benefit programs to defined contribution plans. While employers utilized stock options and 401 K matching funds to enhance employee retirement, employers were off the hook for long-term retirement obligations. In many regards, this began what is currently referred to as a "race to the bottom" where employers have continually cut worker benefits while maintaining a competitive edge. While private sector employers have the flexibility to compensate employees creatively, the public sector is limited.
There is a distinct economic benefit to having well funded retirement options. Not only does it keep retirees off the public dole, but it also allows them to pump dollars back into the local economies. Cash-strapped states and local governments are now searching for ways to limit, amend, and in some cases terminate defined benefit programs. And that is part of the reason OEA paid for me to go to Chicago last week... More to follow.