Sunday, March 6, 2011

McClatchy Prints the Truth

Fox "News" may claim to be "fair and balanced" but they simply a propaganda machine.

If you want real news, you need to go to a media outlet with integrity and a commitment to truth. Here's a bit from an article by McClatchy newspapers:
From state legislatures to Congress to tea party rallies, a vocal backlash is rising against what are perceived as too-generous retirement benefits for state and local government workers. However, that widespread perception doesn't match reality.

A close look at state and local pension plans across the nation, and a comparison of them to those in the private sector, reveals a more complicated story. However, the short answer is that there's simply no evidence that state pensions are the current burden to public finances that their critics claim.

Pension contributions from state and local employers aren't blowing up budgets. They amount to just 2.9 percent of state spending, on average, according to the National Association of State Retirement Administrators. The Center for Retirement Research at Boston College puts the figure a bit higher at 3.8 percent.

Though there's no direct comparison, state and local pension contributions approximate the burden shouldered by private companies.


Also fueling backlash is the perception that state and local workers don't contribute to their own retirement funds the way private sector workers do.

Four states have non-contribution public pension plans_ Florida, Utah, Oregon and Connecticut. Missouri until recently had a non-contribution policy for state workers, as did Michigan until 1997. Michigan workers hired before 1997 still don't pay toward their pensions, and some teachers in Arkansas don't have to contribute toward theirs. Tennessee doesn't require contributions from most workers and employees in the state higher education system.

Those notable exceptions aside, most states require employee contributions. The midpoint for these contributions for all states and the District of Columbia is 5 percent of pay, according to academic and state-level research. That contribution rate climbs to 8 percent for the handful of states whose workers or teachers are prohibited from paying into the federal Social Security program.

By comparison, private-sector workers shoulder a bit more of the burden.

In its data for 2010, Fidelity Investments, the largest administrator of private-sector 401(k) retirement plans, showed employee contribution rates in its plans averaged 8.2 percent of pre-tax pay.

Separately, the Employee Benefits Research Institution estimates that most private-sector employers match up to 50 percent of employee contributions up to the first 6 percent of salary.
Go read the original. It has more details and some excellent graphics. In particular, look at this graphic.

The above makes it very clear that the hysteria thrown up by the political right in the US is just so much nonsense. It is hysteria to cloud people's judgement and let them sneak some legislation past clear-headed and dispassionate review by riding it through on a wave of "the end is nigh" hysteria.

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