Public sector unions claim outsized share of U.S. pension assets!
WASHINGTON - March 10, 2011 - More than a third of the nation’s $9.3 trillion in pension assets belong to state and local government employees, even though they make up only 15% of the U.S. work force, a study shows.
Research by the Spectrum investment group found that public-sector employees, primarily through powerful unions, have accumulated by far the most generous retirement programs in the country. Meanwhile, many private sector workers have had their retirement plans cut back and have had to delay retirement.
Even with $3.4 trillion set aside to pay public pensions, dozens of strapped state and local governments are struggling to make payments. Wisconsin, Ohio and Florida are calling on state employees for the first time to contribute to their retirement plans the way workers do in the private sector.
These efforts have met sharp opposition from public sector unions and are at the center of battles over whether unions should have the right to collectively bargain with the government over pension and health care benefits.
The $3.4 trillion total set aside for public pensions understates the burden for states and taxpayers since the plans collectively are underfunded by as much as $2.5 trillion, said Milton Ezrati, senior economist at Lord Abbott & Co.
“The undeniable fact is that most states and municipalities offer more generous pensions than they can afford,” he said, noting that the plans typically allow employees full retirement benefits after 20 or 30 years of employment and include generous cost-of-living increases, health care benefits and other perks that are not common in the private sector.
