Public employee pensions are bankrupting state budgets.
AFSCME, one of AFT and NEA’s national labor allies, represents more than 1 million public employees. An AFSCME December fact sheet clearly makes the case for publicly funded pensions.
“State and local government pensions are, for the most part, well managed and not the source of budget problems for most governments. In 2008, state and local government pension expense amounted to just 3.8 percent of all (non-capital) spending. Contributions are expected to increase in the future to cover for investment losses and many public employers’ failures to adequately contribute in the past. However, the increase in contribution rates will result in pension costs, in aggregate, approximating a still-manageable 5 percent of state and local government spending by 2014 and beyond.”
The National Association of State Retirement Administrators said public pensions have exceeded the expected rate of investment return by 1.5 percent for a 25-year period beginning in 1985.