Monday, June 21, 2010

States quietly reduce pension benefits for employees yet to be hired or new employees

States are looking for ways to control pension costs, and apparently they are doing so in the most inconspicuous way possible, by cutting benefits and raising co-contribution requirements for employees yet to be hired, according to a Sunday June 20 New York Times story by Mary Williams Walsh, “In budget crisis, states take aim at pension costs,” link here.

Illinois raised its retirement age for public employees to 67, but only for future employees. Current workers can still retire at 60, sometimes at 55.

The retirement crisis has come on quickly partly as a byproduct of union (and corporate policies for salaried or management workers) practices that for years encouraged “early retirement” as early as 55. I was part of that culture, which is no longer sustainable.

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