Wednesday, September 5, 2012
Texas public employees could see their pension plans change dramatically if conservative activists have their way. Activists are calling on the legislature to get rid of the guaranteed retirement benefit for new employees as a way for the state to save money, Statesman.com reports.
The state's two largest pension funds are currently considered to be doing well. They have over three-quarters of the assets necessary to cover their obligations. The Employees Retirement System of Texas has enough to pay benefits for the next seven decades. Employee advocates say that the critics are trying to use other states' underfunded pension systems to overhaul the Texas one.
Conservative groups are in favor of moving new employees to a 401(k) type system, while keeping current employees in the pension system. However, recent reports caution against such a change, saying that it would do nothing to decrease the unfunded liability and might cost the state even more because the new employees would no longer be contributing to the pension fund.
In contrast to other states that have seen conflicts with public sector employees, in Texas, state employees don't have the ability to bargain collectively and their benefits and compensation are actually lower than the private sector. However, these differences may not stop the conservative lawmakers from having a showdown over benefits in the next session.