Promise made, promise broken, again. As recently reported by WCAX, the upcoming legislative session is focusing on the expected “budget deficit” caused by the state retirement system due to the debt growing faster than revenue, it is claimed. I have to ask how a fund that represents about 2 percent of the annual budget spending causes these crises.
Since that same Legislature has seen fit to spend retirement funds with the claim that spending said funds has an “immediate impact far less than for most operating programs” as justification, what else would you expect? That is like spending your house mortgage payment to buy tickets to a show because the payment isn’t due until after the show. The money was there to make the house payment and you didn’t put it back in time, as you promised you would, so checking is now short of the needed funds.
Make the payments to the fund as promised and leave the money alone. There is a thought foreign to the Legislature. The history of under-funding has led to this situation, not the fund itself.
Moreover, the latest idea will, in fact, make things worse. But the sales pitch is on. The Legislature now wants to change the “Defined Benefit” system to a “Defined Contribution” system. Simply stated, they want to gamble in the stock market with retirement funds. Statistically, DB systems perform better than DC systems. But, hey, it is not their money at risk. Money managers with their fees and hidden costs will make their profits and the retirees are left out in the cold “when” their money is lost.
As a 15-year retired state employee, I have a message to Montpelier, and Washington for that matter: Quit spending money we don’t have and fully fund the programs we need and use.
Alfred S. Blakey