Pension and benefits, no room for mistakes

August 7, 2013 

There is recent news that Chicago, the third largest city in the United States, is facing a huge financial issue. It centers around pension liabilities. The teachers retirement fund is about to go under and the other pension funds are $19.5 billion in the red. The fickle finger cannot totally point to city leaders. The Illinois Legislature makes the rules and has allowed the city to underpay into the funds for years. But in less than a decade the foul smelling bird may come home to roost. The plan is for the city to make up the difference. Chicago’s Mayor Rahm Emanuel says he won’t raise taxes to cover the pension deficit. That leaves cutting benefits one of the only options. Politically, that’s a land mine laden landscape no one wants to cross.

With Detroit’s recent bankruptcy and the very real prospect that pensioners there will be given short-shrift, there is a tendency in smaller cities to think they could never find themselves in such a situation. Ask that same question to leaders who are trying to pull out of bankruptcy in Stockton, Calif. (Population 291,000), or San Bernardino, Calif. (Population 209,000). There are even smaller cities that are drowning in a sea of red ink for reasons running from corruption (Escorse, Mich., population 9,512) or Harrisburg, Penn., (population 50,000) due to a failed waste to energy plant.

Why should these examples concern Middle Georgians, particularly those in the new consolidated government of Bibb County? One of the most vexing issues decided by the Macon-Bibb County Transition Task Force had to do with pensions. A committee of the task force decided to leave unchanged the plans for city, county and fire/police employees. New employees would be under a separate plan.

While the decision to leave present employees untouched is understandable because it is a hot potato issue, the separate plan for new employees does not require them to pay into their plan. That needs to be revisited.

It is a rare industry that does not require employees to contribute to their pension or health benefits. Recommendations for the new government’s health benefit coverage should be delivered and voted on by early next month.

This is by no means criticism of the work the transition team is doing. It’s a tough slog with real and political ramifications. According to The National Conference of State Legislatures, “annual premiums for employer-sponsored family health coverage reached $15,745, in 2012, up 4 percent from 2010, with workers on average paying $4,316 toward the cost of their coverage. ... In 2009, the employees’ share was $3,354 for family coverage.

The advice is to be careful and prudent. The old saying that government employees get a few perks because of low pay is a tired one that has led a number of communities down a path that ultimately hurt their employees and retirees.

There are no white knights able to ride to the rescue. We must get this right.

Correction: In Sunday’s editorial we stated that absentee ballots would be delivered to voters who are ill even on Election Day. That only applies to voters who are hospitalized.

The Telegraph is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service