Letters to the Editor
'Times' Joins Pension Attack

To the Editor:

The attack on defined benefit pension plans is becoming particularly dangerous. The defeat of President Bush's proposal to eliminate the greatest defined benefit plan of them all, Social Security, has shifted the attack to public-employee pensions.

The New York Times in articles on Aug. 20 and Aug. 22 joined this feeding frenzy. One story said that "... state politicians have happily showered city employees with generous pension enhancement - annual cost-of-living increases, holiday bonus payments, early retirement with full benefits."

These articles conjure up a picture of greedy public servants feeding at the public trough. With respect to the cost-of-living adjustments (COLA), the maximum amount payable is 3 percent of the first $18,000 in pension. The cost of living is payable at a rate of 50 percent of the increase, which cannot exceed six percent in any year.

For example, if someone receives a pension of $51,000 per year, only the first $18,000 of that sum is credited for COLA, and only at the rate of 50 percent of the COLA to a maximum of 6 percent, for a net maximum increase of 3 percent for the first $18,000, equaling $540.

Since the COLA law was enacted, we have never received the maximum of $540 because inflation has not risen to a 6-percent per year level. In fact, for the year 2006, we will receive 1.7 percent of the first $18,000, for a total of $306, or $25.50 per month. In 2005, we received $288, or $24 per month, hardly munificent sums.

Also, retirees have to wait five years and be at least 62 years of age before they qualify for COLA payments. Unlike Social Security, retirees do not receive the COLA adjustments immediately upon retirement. The Times refers to COLA payments as "the envy of private-sector workers, whose pension benefits have eroded." Nowhere is reference made to the largest pension system of all, the tens of millions of Americans who receive monthly Social Security pensions with COLA which are reimbursed at 100 percent of the cost-of-living, up to a level exceeding $97,000.

Besides COLA, The Times makes it appear that the average city retiree receives approximately $50,000 per year in pension benefits. In fact, according to State Comptroller Hevesi regarding the New York State Common Retirement Fund, "... 70 percent of non-uniformed retirees earn pensions that are less than $20,000 per year, 50 percent earn pensions that are less than $15,000, 44 percent earn pensions that are less than $10,000 and 22 percent have pensions under $5,000."

Re: "Early retirement with full benefits," it should be noted that for non-uniformed forces, age 55 is usually required with at least 25 years of service, and "full benefits" usually approximates 50 percent of salary. The average salary of a working member of District Council 37 is $30,000 - and 50 percent of that is only $15,000 per year.

Comptroller Hevesi points out "... Individuals who receive more than $20,000 are most often uniformed personnel - police and firefighters who put their lives on the line to protect the public and, because of the hazardous nature of their work, have a higher incidence of disabilities and are forced to take early retirement more often than anyone else."

Finally, it should be noted that while criticism is made of the unions' appeal to Albany for pension improvements, no mention is made that bargaining for pension improvements is a prohibited subject of collective bargaining. Unions and retirees have no alternative in attempting to secure pension improvements if the employer refuses in collective bargaining to consider these demands.

Pensions were originally negotiated by the unions in the 1960s until the law was changed, prohibiting pension negotiation. The unions always preferred to negotiate pension improvements rather than have to depend totally on the legislative process.

Because Social Security and defined benefit pensions provide guaranteed income to recipients, the beneficiaries can exist with reasonable lifestyles and not be a burden to society. Also, according to Comptroller Hevesi, "... about 80 percent of beneficiaries and retirees continue to live in N.Y. State ... (and) spend the 4.5 billion in pension benefits in our state." It would be hoped that this letter contributes to a balanced discussion of pension benefits for public employees.

STUART LEIBOWITZ, President, The Retirees' Association of District Council 37