Should workers have their retirement savings or their pensions stolen from them, only to be tossed a mere 16 cents on the dollar?
Is it right and fair and just that a retiree, who has worked for decades to earn a $30,000 annual pension, be left to live on only $4,800 a year?
On Tuesday, Cincinnati voters will decide.
Issue 4 is a charter amendment petitioned onto the citys ballot by a citizens group called Cincinnati for Pension Reform (CPR), with some ties to local Tea Party groups. If passed, the ballot initiative will give new city employees a 401(k)-style retirement program, while protecting the pensions of current city retirees and workers through annual audits, publicly reported results, and requiring the city to take steps to close any pension fund deficit.
The Queen Citys public employee pension system is currently in deep trouble. Even by the citys rosy accounting, its only 61 percent funded, with a whopping unfunded liability of $862 million. In fact, Moodys recently downgraded the citys credit rating specifically because of its pension liabilities.
As if thats not horrendous enough, a new study of Cincinnatis pension problem by Ohios Buckeye Institute for Public Policy Solutions is entitled, Worse Than You Think. The studys author, Dr. Andrew Biggs of the American Enterprise Institute, writes, a more accurate measure, the fair market valuation preferred by most economists, reveals unfunded liabilities of over $2.5 billion and a funding ratio of only 35%.
Nonetheless, Issue 4 faces fierce opposition from a group primarily funded by several different branches of the American Federation of State, County, and Municipal Employees. In just two weeks, reports the Cincinnati Enquirer, the committee raised $207,970. . . . It received contributions from only two individuals, totaling $750, including a $500 contribution from former acting Cincinnati city manager and current Dayton city manager Tim Riordan.
Jeff Harmon, president of the Cincinnati Organized and Dedicated Employees (CRAG), a union representing 850 city workers, said, This measure is going to lead to higher taxes and possible lawsuits for the city and would potentially bankrupt Cincinnati.
Why would actually funding the promises the city has already made to workers lead to higher taxes or bankrupt Cincinnati?