By RAYMOND SANTANDER
There is perhaps no greater benefit provided to union members than retirement security, which comes in the form of a defined benefit pension.
Members receive the defined benefit, a traditional pension based on their years of service that provides a guaranteed monthy payment, when they retire after many years of dedicated public service — often a hazardous and physically (and emotionally) taxing service.
The pension ensures our members a dignified retirement, where the pensioner need not be a burden to the public or a family member.
Our retirees pension benefits are modest: about $21,000 to $22,000 per year on average (higher for more recent retirees). With Social Security, many of our retirees have retirement income of about $33,000 per year. This is hardly lavish, given that many of our retirees live in New York City.
Our members both contribute their hard-earned dollars to the pension fund (continuously for new employees hired after April 1, 2012), and they are prohibited from pension spiking (boosting final year earnings to maximize pension value).
I mention this background about our members’ retirement security and defined pensions to remind us all of the importance of this benefit and to provide some basic facts that will help us defend our hard-earned benefit in any forum — whether it is in the community, with our family and friends, or with our elected representatives — against unfair attacks.
Tragically, defined benefit plans are all but extinct in the private sector, which employs most Americans. Now the defined benefits in the public sector are the focus of the political and corporate attack on retirement security.
The private sector jettisoned defined pensions in favor of the wholly inadequate 401(k), which will not provide sufficient retirement income for most Americans. The average 401(k) account totals just $20,000. Both the shrinking middle class and the expanding lower middle class and ranks of the poor cannot hope to save enough money to be able to retire.
The 401(k) was instituted in 1982. It was part of President Ronald Reagan’s war on the poor and middle class and a component of the corporate strategy of abolishing defined pensions and off-loading employer obligations to their workers, who now must manage their investments and figure out how much to save for their retirement.
Over 30 years later, Reaganomics, corporate greed, and the war of the 1 percent against us all have created a
gigantic retirement crisis, growing larger by the day as 1,000 people daily reach the age of 65. A large proportion of retirees rely only on Social Security for retirement income. But Social Security was never intended to be the sole source of retirement income.
We must stand strong against the attack on our defined benefit pensions. We should also support such reforms as the expansion of Social Security and state-run pension funds to address the retirement crisis.
Both as a great union and as individuals, we must continue this fight for all Americans.
Raymond Santander, an assistant director in the DC 37 Research and Negotiations Dept., is an appointed trustee of the New York City Employees’ Retirement System. This editorial originally appeared in the July-August issue of Public Employee Press.