OLYMPIA, Wash. - Sixty percent of workers in the United States have less than $25,000 in retirement savings, not counting their home value and any pension plans, according to a new national survey
from the Employee Benefits Research Institute (EBRI). And lately, state government workers in Washington are watching that 'pension' part of the nest egg very carefully - as the Legislature attempts to 'reform' it.
A major point of disagreement keeping legislative leaders in overtime this session is whether to trim or change state workers' pension funds. Proposals include not making the state's annual payment to the pension system this year, and putting new state employees into a less-traditional retirement program.
Greg Devereux, president of the Washington Federation of State Employees, sees this feud as only partly about money - and mostly about ideology - as hard-line conservatives want to privatize retirement systems, from state pensions to Social Security.
"That would give a lot of benefits to the Wall Street crowd. They benefit tremendously when they get the business, when there's alternatives to Social Security or alternatives to public pensions."
Shifting new workers out of the system shortchanges those employees and dries up funding for the system, says Devereux. Republican lawmakers have backed off of a third suggestion: not allowing state workers to retire at age 62.
According to Devereux, these proposals are "like rubbing salt into a wound" for state workers, whom he describes as taking on unmanageable workloads after the last few years of layoffs in state agencies.
"They're doing everything they can to get the work done. They understand their private-sector counterparts are doing that, as well. But, at the same time, to take a 3-percent pay cut, a 25-percent cut in health benefits and then to have your pension jeopardized? That is too much."
The average state worker's pension is about $1,500 a month.
Legislative leaders on both sides of the aisle say they are making progress in reaching a budget compromise that includes the pension system. Devereux says the state retirement plan has been well-managed and does not need what lawmakers are calling reforms.
EBRI's "2012 Retirement Confidence Survey" is online at www.ebri.org