Cities and state governments attempt to undo protections to balance budgets
When an arbitrator ruled this month that Detroit could reduce the pensions being earned by its police sergeants and lieutenants, it put the struggling city at the forefront of a growing national debate over whether the pensions of current public workers can or should be reduced.
Conventional wisdom and the laws and constitutions of many states have long held that the pensions being earned by current government workers are untouchable. But as the fiscal crisis has lingered, officials in strapped states from California to Illinois have begun to take a second look, to see whether there might be loopholes allowing them to cut the pension benefits of current employees. Now the move in Detroit — made possible, lawyers said, because Michigan’s constitutional protections are weaker — could spur other places to try to follow suit.
“These things do tend to be herd-oriented,” said Sylvester J. Schieber, an economist and consultant who studies pensions.
1 comment:
So, the government's word and or signed contract actually means nothing? It's apparently only good for as long as the circumstance fit their liking.....and the CURRENT crop of new employees have confidence that THEIR contracts/pensions/retirement will be honored? Can I go ahead and not pay my mortgage or car payment since my circumstances aren't what they used to be, or because I promised to pay more than I could really afford, because that is the precedent the government seems to be setting here, or does it only work FOR them and not for anyone else? And if the pensions they negotiated turned out to be be inadequate for the retirees (with gas at $5/gallon, for instance) do they get to renegotiate the monthly pension payments??? Riiight. Thats what I thought.
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