Legislature not willing to share the pain
52013 share the pain
SANTA FE – Share the pain. That refrain was heard often during the past two legislative sessions as lawmakers debated how to fix the state budget.
Their decision five years ago was to put the biggest hits on the two public employee retirement plans. Both the Public Employee Retirement Act and the Educational Retirement Act were changed to have employees pick up a good sized share of the employers' contribution.
This was only to be temporary until the state was in the black again. But when the state got in the black last year, lawmakers changed their minds. They wanted more from employees at the state, county, municipal and school district levels.
Various plans were submitted last year to change the benefit formulas. None of them passed so lawmakers said they wanted employees, employers and the two retirement boards to get together on a proposal that would share the pain among retirees, active employees and those yet to be hired.
That was accomplished after Gov. Susana Martinez made her own proposal to have employers pay less than their share. But there was one segment that didn't share the pain at all.
Legislators didn't take their share of the hit. They have a retirement plan much more generous than public employees do but lawmakers didn't share that pain.
The legislative retirement plan received considerable publicity recently when former Rep. Dan Foley, who represented Roswell at the time but now sells insurance in Rio Rancho, was revealed to be profiting handsomely from the retirement plan.
Foley didn't do anything wrong. It was his for the taking. Foley left the Legislature at 39. He had made $5,000 in contributions to the plan during the 10 years he served.
When Foley becomes eligible for Social Security at 67, he will have received $450,000 from the plan, according to an Associated Press article. Those figures don't meet the actuarial soundness the Legislature was trying to achieve for the employee pension plans.
Why should legislators put some skin in the game? They are such a small group it really wouldn't help the fund. But it would help employee morale. It's called leadership by example.
The same principles hold for Congress too. The majority of them are quite proud of the across-the-board sequestration cuts. The only problem is that the Obama administration cut the wrong areas. It wasn't supposed to cut programs the congressional majority liked. They say those cuts were political.
The president couldn't cut anything in the legislative branch of government. And Congress isn't going to cut any of its perks.
Actually, Congress did cut its cushy benefits once. Until 1984, Congress' retirement plan was incredibly generous. It looked much like some of the descriptions you see on the Internet around election time every two years. But those rants now are almost 30 years old.
Members now have a retirement plan very similar to that of federal employees. They pay into it and they also contribute to Social Security. Beginning next year, they will be covered by Obamacare and will choose a plan from an insurance exchange. And they voted in 2009-2011 to not take a cost-of-living salary increases.
So there has been some pain sharing at the federal level. Unfortunately for Congress, it hasn't helped its popularity. So Mike Coffman, a Colorado Republican, is making another go at it.
Coffman has introduced H.R.423, which would eliminate defined benefit pension plans for members of Congress completely. He would keep "The Thrift Savings Plan," which is a defined contribution plan.
Don't expect to see Coffman's legislation succeed. But it might be an indication of at least a small tendency to share the pain.
My wish is for Congress to work a little harder. They get paid $174,000 salaries for working Tuesday morning to Thursday noon and taking numerous weeks of vacation. It seems like maybe half salary would be about right.
SANTA FE – Share the pain. That refrain was heard often during the past two legislative sessions as lawmakers debated how to fix the state budget.
Their decision five years ago was to put the biggest hits on the two public employee retirement plans. Both the Public Employee Retirement Act and the Educational Retirement Act were changed to have employees pick up a good sized share of the employers' contribution.
This was only to be temporary until the state was in the black again. But when the state got in the black last year, lawmakers changed their minds. They wanted more from employees at the state, county, municipal and school district levels.
Various plans were submitted last year to change the benefit formulas. None of them passed so lawmakers said they wanted employees, employers and the two retirement boards to get together on a proposal that would share the pain among retirees, active employees and those yet to be hired.
That was accomplished after Gov. Susana Martinez made her own proposal to have employers pay less than their share. But there was one segment that didn't share the pain at all.
Legislators didn't take their share of the hit. They have a retirement plan much more generous than public employees do but lawmakers didn't share that pain.
The legislative retirement plan received considerable publicity recently when former Rep. Dan Foley, who represented Roswell at the time but now sells insurance in Rio Rancho, was revealed to be profiting handsomely from the retirement plan.
Foley didn't do anything wrong. It was his for the taking. Foley left the Legislature at 39. He had made $5,000 in contributions to the plan during the 10 years he served.
When Foley becomes eligible for Social Security at 67, he will have received $450,000 from the plan, according to an Associated Press article. Those figures don't meet the actuarial soundness the Legislature was trying to achieve for the employee pension plans.
Why should legislators put some skin in the game? They are such a small group it really wouldn't help the fund. But it would help employee morale. It's called leadership by example.
The same principles hold for Congress too. The majority of them are quite proud of the across-the-board sequestration cuts. The only problem is that the Obama administration cut the wrong areas. It wasn't supposed to cut programs the congressional majority liked. They say those cuts were political.
The president couldn't cut anything in the legislative branch of government. And Congress isn't going to cut any of its perks.
Actually, Congress did cut its cushy benefits once. Until 1984, Congress' retirement plan was incredibly generous. It looked much like some of the descriptions you see on the Internet around election time every two years. But those rants now are almost 30 years old.
Members now have a retirement plan very similar to that of federal employees. They pay into it and they also contribute to Social Security. Beginning next year, they will be covered by Obamacare and will choose a plan from an insurance exchange. And they voted in 2009-2011 to not take a cost-of-living salary increases.
So there has been some pain sharing at the federal level. Unfortunately for Congress, it hasn't helped its popularity. So Mike Coffman, a Colorado Republican, is making another go at it.
Coffman has introduced H.R.423, which would eliminate defined benefit pension plans for members of Congress completely. He would keep "The Thrift Savings Plan," which is a defined contribution plan.
Don't expect to see Coffman's legislation succeed. But it might be an indication of at least a small tendency to share the pain.
My wish is for Congress to work a little harder. They get paid $174,000 salaries for working Tuesday morning to Thursday noon and taking numerous weeks of vacation. It seems like maybe half salary would be about right.
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