One of my favorite children’s books is titled “The Monster at the end of this Book.” In it, Grover (of Sesame Street fame) pleads with the reader not to turn the page, or else you will unleash the horrible monster. As it turns out (Spoiler ALERT), lovable furry old Grover himself is the monster, and all is well.
Children are entertained by Grover’s protestations, but never frightened by all his warnings against turning the page, as they are quite silly.
Similarly, government union leaders are making dramatic but misleading objections against public pension reform. Their scary rhetoric—that lawmakers are “stealing retirees pensions,” that pension reform will “cost taxpayers billions,” that legislators are “destroying the middle class” and “taking away retirement security”— has been debunked and should not be taken seriously.
In reality, pension reform ensures the integrity of government employees’ retirements and saves taxpayer dollars.
Thankfully lawmakers in Pennsylvania have, like children reading “The Monster at the end of this Book,” pressed on with pension reform, understanding that the most dangerous course of action is to do nothing.
Today, the State Senate passed Senate Bill 1 (read our news release on that), by at 28-19 vote. SB 1 would create a hybrid system, with a defined contribution plan and a cash balance component, for all new hires. Yesterday, the State House advanced House Bill 727, which would offer a defined contribution plan for all new hires.
Pennsylvania should follow the lead of 18 other states that have moved to a defined contribution or hybrid pension plan—without seeing the horrors claimed by union leaders—delivering affordable and predictable retirement benefits, which can’t be politically manipulated or underfunded.
See Commonwealth Foundation’s pension reform toolkit for more information on pensions.