New Rules: Congress Could Take Aim at Public Pensions Soon
Private sector law could be misapplied to public pension funds
Measure twice, cut once," advises the old carpenter's rule. But in the convoluted world of so-called pension reform, the new rule could be "measure once, cut twice."
That's why the AFT joined with 27 other public employee groups this summer in urging Congress to reject schemes to apply private sector rules to public pensions. The warning is timely because on Aug. 17, President Bush signed a new law ratcheting up pension requirements for companies-rules that likely will pressure more private sector employers to jettison high-quality, traditional pensions for their workers.
Any attempt to graft the new rules onto public pension plans would be wildly inappropriate and could spell disaster for public employees and their rights to a decent retirement, the coalition warns.
Pressure already is building.
Many critics of strong pensions have stepped up efforts to bury the distinction between public and private plans now that the Pension Reform Act of 2006 is law. As the new private pension law was nearing completion, ranking members of the Senate Finance Committee asked investigators to conduct a sweeping study of public pensions. "Many of the public sector plans are even more poorly funded than their private sector equivalents," the lawmakers wrote in a letter to the Government Accountability Office, which also asked GAO to fold in a financial assessment of health plans for public sector retirees as well.
The letter prompted the AFT and other public employee groups to step in quickly to correct the record. Public and private pensions are not equivalents: There "are fundamental differences between governments and business that result in critical distinctions between plans in each sector and the way in which they are accounted for and measured," the coalition reminded Congress and the GAO in an Aug. 2 letter to lawmakers.
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Publication information: Article title: New Rules: Congress Could Take Aim at Public Pensions Soon. Contributors: Not available. Magazine title: American Teacher. Volume: 91. Issue: 2 Publication date: October 2006. Page number: 19. © American Federation of Teachers Feb 2009. Provided by ProQuest LLC. All Rights Reserved.