To the editor:
The recent editorial by the Commonwealth Foundations would have us believe the “free market” system holds the key to reforming the state pension system.
The foundation advocates a system along the lines of a 401(k) plan. Such a plan would be significantly at the mercy of the ups, downs and whims of the stock market. A 401(k) program not only provides a shaky retirement nest egg, it also creates an addition $40 billion debt in the state pension system, which was verified by independent actuaries last year. It would create such a debt because all of the current retirees would still have to receive their pensions.
This should sound familiar to anyone who paid attention to right-wing rhetoric when the suggestions to do the same to Social Security were rampant a few years ago. Those suggestions were very quickly put to rest by most logical people when the stock market fell apart. No matter how reasonable right-wingers made the idea sound to base everybody’s retirement solely on the free market concept, once the stock market went south, the idea joined it.
Retirement can be a fragile time for people who do not have a fixed amount of funds coming in. That is one of the founding tenets of the Social Security and state pension systems.
Unless you are able to amass what most people would consider a fortune before retirement (and only a very small percent of the population is able to do that), pensions, by definition, should provide a stable income for retirees.
The “true” reform for the state pension program must be to stop the deliberate underfunding of the system and support bipartisan legislation to establish a minimum floor for pension contributions.