the attack on public sector pensions district 7 conference may 2, 2010 brooks sunkett, vice...

The Attack on Public Sector Pensions District 7 Conference

May 2, 2010

Brooks Sunkett, Vice President CWA Public, Healthcare & Education Workers

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“Starve the Beast!”

Ever since the election of Ronald Reagan, conservative activists, economists, pundits and politicians have pressed for more and more tax cuts.

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Corporate Income Taxes now generate less than

10% of Federal Tax RevenuesIncome Taxes as a Percent of Federal Receipts

0%

10%

20%

30%

40%

50%

60%

Individual Corporate

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Tax Cuts Have Worked Out Well for the Rich

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After 30 years Dominated by Tax Cuts In most states,

property and sales taxes have skyrocketed placing ever greater burdens on homeowners, fueling their opposition to government programs, even those from which they benefit

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To Get Ready for Retirement you must Save Money While You’re Working

Three Ways to Save for Retirement

1. By Yourself

2. Employer Sponsored Defined Contribution

3. Employer SponsoredDefined Benefit PensionPlan

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Protect Your Defined Benefit PlanMany legislators and anti-government activists would like to do

away with our pension benefits. This would be a huge loss for workers in the public sector.

Here are some of the advantages of a Defined Benefit plan to workers

and to their employers:

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What’s Wrong with a Defined Contribution Plan?

Employees bear all the risk for investment losses

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Access to Retirement Savings Options Private

SectorPublic Sector

Personal Savings Only

40% 0%

Defined Contribution Plan (may have DB plan)

54% 29%

Defined Benefit Plan (many have DC plan too)

21% 83%

Source: Bureau of Labor Statistics: Private sector data 2006; Public Sector 2007

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When Will I Get My Pension?

Generally all full-time employees participate in the plan, but part-timers may also be included, sometimes you must have a certain amount of service before you become eligible.

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How are Defined Benefit Pensions Funded?

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Where Does the Funding Originate?

Source: National Institute on Retirement Security, February 2009

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What Will My Pension Pay Me?

The amount of the

monthly benefit is

usually based on

your earnings,

your total service

to retirement.

There are three

different methods

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Where Does the Funding Originate?

Cost to Provide a Benefit of $2,200/mo, Starting at Age 62

DC Plan

DB Plan

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$ 354,962

$ 549,903

Source: National Institute on Retirement Security, February 2009.

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What Can We Do?(In addition to building our bargaining power, of course)

A. Know the PlanB. Monitor its FinancesC. Follow Trustee

Decisions

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Unions Can and Must Fight Unions Can and Must Fight Pension Cut Backs!Pension Cut Backs! Learn the Facts Identify Ulterior

Motives Recognize Gimmicks Challenge Employer Assumptions Be Proactive Educate, Mobilize

Members Public Message