Pensions enable retirees to live out their older years in dignity. In the United States, an employer-provided retirement plan has long been considered an essential complement to Social Security and personal savings to ensure retirees have satisfactory incomes and certainty for household finances. However, public pensions have increasingly come under attack as private sector employers have scaled back their pension offerings to all but the most highly compensated employees, and public budgets have been decimated by a deep recession and anti-tax ideology.
In contrast to some states, Washington has 99% of its public pension obligations funded – the state’s public pensions are in good financial shape. These combined pensions have net assets of $57.6 billion (as of June 30, 2010), having gained $5.5 billion in the past year.
Washington state’s public pensions provide adequate and appropriate retirement security. The current median public pension benefit is $18,182 a year. 78% of public pensions are less than $30,000 a year. 475,000 workers and retirees are members of these public pension systems – one out of every fourteen residents in Washington state.
Pension benefits result in $3.5 billion a year in state economic activity, as well as 23,000 jobs. For every dollar contributed by public employers for pensions, over nine dollars is generated in our economy, and through the multiplier effects of consumption expenditures, 40% of those public contributions are returned as tax revenues to public entities.
Public pensions deliver regular, dependable monthly benefits to retired public servants. This is in stark contrast to the private sector, where half of workers lack any employer-based retirement plan and risky defined contribution plans have become the norm.
Individuals and businesses in Washington and across the country have more money, income and wealth than 30 years ago when public and private sector pensions were strongly supported. To universalize adequate retirement security for Washington residents, and minimize the public costs of care and subsistence income for low-income retirees, Washington should continue to responsibly fund our public pensions and enable private sector employees to participate in comparable pension systems that provide similar certainties of outcome, and, most of all, peace of mind.
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December 6, 2018
The State of Working Washington 2018: Part 4