Resolution: 72A-10-10
Adopted: July 27, 2010
Employee pensions are under attack. The aggressive corporate assault on defined benefit pension plans, plans which provide a more secure framework for retirement, has decimated coverage in the private sector, and today fewer than 20 percent of private sector workers are covered by a defined benefit plan. Now some politicians and others have targeted public employees’ pension benefits, and with roughly 80 percent of public employees covered by defined benefit plans, they now find that their pension plans are under siege.
To be sure, the average pension benefit of a public sector retiree is higher than that of the average retiree from the private sector. A number of factors contribute to this. First, union representation of 40 percent in the public sector compared to only 7 percent in the private sector strengthens public employee negotiating power and secures better pension benefits. Second, public employees have historically traded lower wages for a secure pension as a form of deferred compensation. Third, public employee pension funds receive contributions from both employees and employers and, as such, represent the accumulation of workers’ own contributions and their deferred wages.
Recently, some legislators and policy makers at all levels, as well as media pundits, have begun attacking public sector workers with exaggerated claims about public worker pensions and compensation. They are making scapegoats of public workers, suggesting they are the cause of budget shortfalls rather than acknowledging that a troubled economy and misguided tax and fiscal policies have endangered public budgets and threatened the social safety net. As part of these attacks, misguided politicians propose to diminish the pension plan to a defined contribution plan which is more costly to administer and shifts investment risk to individuals. These groups seek to pressure public employees into making concessions and to give back the pension benefits that they rely on for a secure retirement.
Rather than race to the bottom, we should all unite to protect every American’s retirement security.
Public pension plans are important pools of investment capital, owning 8 percent of corporate America. We should be an effective voice for corporate governance. Investments should be made transparently, with independent audits and we should seek to invest in local regions with a long-run horizon. As workers accrue pension benefits over their careers, we must work to develop mechanisms to permit portable benefits. Further, given the importance of pension decisions, workers must be represented on pension boards and should have access to retirement education programs.
Recognizing that we cannot win this battle alone, and that both private and public sector workers are seeing an assault on their pension benefits, we must join together, regardless of our employer, and work with other unions to learn from each other and to develop creative pension strategies, both offensive and defensive, such as identifying alternative cost savings, launching legal challenges, negotiating solutions, seeking legislative relief, and media messaging.
Pension plans not only protect our members in retirement but add to economic activity. Each dollar of spending creates $2.36 in economic activity in the surrounding community.
Providing secure retirement income built on pensions, Social Security, and savings for all Americans remains a principal goal of CWA.
Resolved: Defined benefit plans provide the gold standard for retirement income. Wherever possible, we should strive to establish and maintain defined benefit plans for public employees.
Resolved: The Union, at both the national and local levels, commits to the development of retirement education programs tailored to local needs and to the wide dissemination of this information among our members.
Resolved: CWA public sector bargaining units are encouraged to seek representation on boards that oversee pension funds that cover their members. These representatives would be expected to participate in educational forums to improve their understanding of pension practices and concepts.
Resolved: CWA members and leaders should speak out in public forums to correct false information about public workers to stop elected officials and public figures from using public workers as scapegoats for failed economic and fiscal policies.
Resolved: CWA should seek broad political support for adequate retirement income and to protect pension plans and Social Security.