Quote:
Originally Posted by Chesapeake Bill
Jim,
Easy, yes. Logical, maybe not. I applaud your intent and agree that we need to change. However, the agreement goes beyond a labor contract. By that I mean the agreement pertains to a longer timeframe (typicaly twenty years or so for Fire and Police since I can't speak about teachers). I would be interested to see some concrete examples of how the industry did this years ago (I confess that I am not familiar with how they calculated that). As you can see I'm not ashamed to admit that I do not have knowledge of certain aspects--much like I am sure you have no knowledge of certain aspects of the agreements made regarding longevity in the pension plans. Together, we can learn and find equitable solutions. These are tough decisions and the individuals that are in those positions are putting their lives on the line in return for the agreement. It may not be easy to get the same caliber of person to fill those positions in the future (...and then again, it may be easier given the transient nature of this new generation). I personally think a cut off date where anyone after the date is given a certain amount into their 401K and those before continue with the plan may be the way to go. However, I'm still learning all the sides of the issue.
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The private sector has made these changes in many different ways. Most companies either cut the pension all together or grandfather it so that any new employee hired after X date is left out. Other private companies, like my wife's actually grandfather vested employees with a pension but after you make over a certain salary, the higher wage earners pay into the pension fund from their salary to subsidize the whole plan (similar to taxing the "rich" to give to the poor) Let’s see a union or public employee make that concession.
As for caliber of people.......the private sector has not had a problem hiring people when they need to and they are not loosing high caliber people due to not offering a pension. I’d be willing to bet that if pensions were rolled into a 401K's we would not see police and teachers fleeing from their jobs. I also think people that are years from retirement (like me) assume that a pension will not be there for them in 30-40 years so it would not make an impact on finding “high caliber” people.