Quote:
Originally Posted by mosholu
I do not think it is as easy as that for the following reason: Isn't the main problem with the pension systems for the states is that they have been underfunded. Are you suggesting that the pension plans would lose any amounts that have not been funded yet. If so, I think that would be difficult from a political and legal stand point. It would be a hard argument to make that people should take dramatic cuts to their benefits accrued because prior governments ignored their pension obligations. As far as turning them into 401(k) plans I think it results in just another large subsidy to the financial sector. Maybe they can be self directed but to be honest I really do not know how much flexibility there is.
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What I would suggest is, teachers have earned whatever portion of their pension that they have paid into. Then, after som edate, they no longer "earn" more of their pension, but fund into a 401(k). That's what the private sector did. As for subsidizng the private sector...to me, that's a better alternative than doubling property taxes, which is what you'd have to do to adequately fund those insane pensions.