The Decline of Pension Plans

The Post had an article on the decline of pension plans provided by companies, pointing to Minnesota and Iowa as exceptions to a general decline of such plans.

What stood out to me was that MN and IA weren't exceptional, didn't stand out in any of the maps shown from 1980 to 2014.  In the 1980-94 period they weren't in the top rank of states. It's only in the 2014-19 period that they become exceptions.  So whatever is the cause of their slower rate of decline, it seems to me it's unlikely to be deep-rooted trends, such as labor unions. 

Fixing Social Security--Kelman

Mr. Kelman has a post at Federal Computer Week suggesting options for a trade: delay the date at which you get social security in order to get higher benefits, such as long term healthcare insurance later.  Like, don't take SS until age 80, in order to have an assisted living home covered.

I don't have a dog in this fight since I'm not on SS and I'm paying for long term healthcare insurance from OPM  The initial logic is attractive, but it works only for the small subset of people who continue working and/or have enough investment income to retire on, as Mr. Kelman does but most people don't.  But just because it doesn't work for many isn't a bit argument for not providing the option.  I keep believing computers permit us to be more flexible without much administrative cost. 

Changing Federal Pensions

The Washington Post's Lori Montgomery reports that deficit reduction talks are considering changes in federal pensions, specifically requiring an increase in the employee contribution to the system. 

My memory is the Reagan administration pushed through a redo of the civil service pension system in the mid-80's.  Part of the idea was saving money, part was to make federal bureaucrats more able to change careers, part was just responding to the currents in the air (i.e, the general change from defined benefit to defined contribution retirement systems in the private sector).   I'm not aware of any followup studies to see there is more changing around  because the employee can take her TSP (aka gov. 401k) with her. I suspect that aspect was oversold.

 Her last four paragraphs:

Federal employee unions dispute the need for adjustments, arguing that FERS is already significantly less generous than its predecessor, the Civil Service Retirement System. CSRS paid retirees $2,587 per month on average in 2007, versus $944 for FERS, according to the National Treasury Employees Union, one of the largest representing federal workers. And unlike many state employee pension systems, FERS is fully funded.
“We’re sort of surprised, actually, to see the attacks on this as if it were some kind of a gold-plated system,” said Gilman, the union legislative director.
David John, a retirement expert at the Heritage Foundation, agreed that FERS “is far more responsible than most of the state and local pension plans.” But at a time when the federal government is spending drastically more than it takes in, he said, it is reasonable to ask whether taxpayers can afford it.
In the private sector, less than 20 percent of workers still have access to a traditional pension, John said. “With FERS, everyone does.”

I'm one of those CSRS retirees, living high off the hog. :-) In an ideal world, it'd be possible to reduce benefits to me in order to lessen the impact on others.  But in the real world, the only way to reduce benefits to those already receiving them is to change the COLA formula.  Hence Rep. Ryan's proposal to phase in his Medicare changes with those under 55.

Dems Are Wrong

They're planning to push a $250 payment to seniors to make up for the absence of a COLA for social security (and, I'd assume, Civil Service retirees).  I understand the politics, but it's not right.  If the COLA formula is right, you adhere to it, regardless of the answer it gives you.  If it's wrong, you fix it.  If you want retirees always to get a little boost, make the formula more complicated (I love complications) and take it from prior or future years.  But the total disbursed shouldn't be subject to political motives.