Public Workers Fighting to Save Pensions

Public employee defined benefit pensions are under attack in several cash-strapped states like California and New Jersey, where plans are starting to feel the squeeze of the post-Enron stock market downturn, poor investment decisions and plain fiscal irresponsibility.

For the most part, public workers depend upon political clout to maintain fair wages and benefits. In New Jersey, for example, "The only thing protecting our retirement security is a mobilized membership that will convince the governor and legislature to properly fund our benefits rather than trying to cut them," said Local 1037 Executive Vice President Vikki Thurston.

Jelger Kalmijn, president of UPTE-CWA Local 9119, representing 12,000 researchers, technicians and health care workers at the University of California, echoed those sentiments. "Our success depends upon our ability to mobilize an informed membership that understands the pension issue."

District 9 and UPTE-CWA — the University Professional and Technical Employees — joined with other unions in 2005 to defeat legislation endorsed by Gov. Arnold Schwarzenegger to outlaw defined benefit pensions for all public workers in the state and rallied to help nix Proposition 75, a retaliatory ballot initiative that would have restricted public employee unions' participation in the political process.

The Public Employee Retirement System and other public worker pension plans in New Jersey are facing a $12.1 billion shortfall that began in 1994 when Republican Gov. Christie Whitman raided pensions to pay for a $1.2 billion tax cut for the wealthy. Whitman increased employees' contribution to the plan to 5 percent, and through a series of legal maneuvers, she and subsequent governors allowed the state to ride the stock market to cover its pension obligations, deferring payments into the plan.

"The state pensions director testified last fall that they had shortchanged the pension funds by $5.5 billion," said Local 1032 President Jim Marketti.

In May 2005, Acting Gov. Richard Codey, a Democrat, appointed a Benefits Review Task Force that concluded current pension and health benefits cannot be maintained without raising taxes. CWA members turned out for three public hearings. Marketti and others testified for proper funding of the pension plan and against any two-tier schemes that would replace the current defined benefit plan for younger workers and leave them with only a 401(k) savings plan.

In December, the task force called for cleaning up corruption that has allowed part-time political patronage workers, contractors and convicted public officials to collect pensions, increasing the minimum retirement age from 55 to 60 and calculating pensions based on workers' top five years' salaries rather than the current three.

Gov. John Corzine, a Democrat, will submit his annual budget to the Legislature on March 21. "He made campaign promises to fully fund our pensions, but we'll have to wait and see. If they don't get it done by May or June, we're likely to put 60,000 people in the street," Marketti said

In California, Schwarzenegger's earlier scheme to quash pensions failed, but now he and Assemblyman Keith Richmond, a fellow Republican, are back at it, with a new bill to outlaw defined benefit pensions that will come before the General Assembly this year. It would cover some 200,000 public employees — many who don't have collective bargaining — and 160,000 at UC. The university is proposing to require employee contributions of up to 8 percent toward pensions and to create a two-tiered retirement plan barring workers hired after July 1, 2007 from participating in the defined benefit plan, leaving them with 401(k) savings plans only.

"The University of California has had pretty generous retirement benefits, and people have pretty much taken them for granted," Kalmijn said. "We're going to have to be vigilant from here on out and continue to fight against pension take-backs both in the Assembly and at the bargaining table."

For now at least, 10,000 technicians and researchers — UPTE/CWA members — are protected by a new contract with UC they ratified in December.

Not only did the local win funding for long-overdue step increases. The pact also — for the first time — contains language requiring the university to bargain before implementing any proposed pension changes for active workers or retirees.

District 9 Vice President Tony Bixler said CWA will continue to mobilize against Schwarzenegger's anti-pension legislation and other anti-worker measures.