HARRISBURG, Pa., Aug. 14, 2012 /PRNewswire-USNewswire/ -- Pennsylvania AFL-CIO President Rick Bloomingdale and Secretary Treasurer Frank Snyder expressed disappointment in today's joint public hearing on proposed privatization and cuts in public pensions that favors Wall Street greed over the needs of Main Street.
"Defined benefit pensions have long been a part of workers' retirement security since Franklin Roosevelt enacted the 'three legged stool.' The legs were: a company pension, usually a defined benefit plan; Social Security; and a workers personal savings. Wall Street and greedy employers have eliminated their responsibility and placed the entire burden of retirement security on their loyal and long-term workers," Bloomingdale said.
"Defined contribution plans are another way that companies have abdicated their responsibility to the people who have made them successful. Defined benefit pensions allow workers to retire with dignity in their golden years. We will fight to protect retirement security for all workers both in the private and public sector. We will fight any attempt to impoverish both active and retired workers," Bloomingdale declared.
"Even the ideologically driven proponents who believe that workers don't deserve to have decent pensions admit that the cost of their inferior plan is higher than more reasonable solutions that protect retirement security," Bloomingdale said.
"Not only will this jeopardize the retirement security of hundreds of thousands of Pennsylvania workers it will lead to higher costs to taxpayers," Snyder added. "When pensions are slashed, retirees are forced to rely on public services to cover living and health care costs. It's a win/win for Wall Street risk takers who will gamble with workers retirement security at the expense of workers and the taxpayers. In other words more money is taking out of the wallets of hard working families and handed to Wall Street," he concluded.
Even the proponents of privatization admitted during questioning that the transition costs would be very significant. Richard C. Dreyfuss of the Commonwealth Foundation admitted that the switch from a defined benefit plan to a defined contribution plan would cause the unfunded liability to increase. When asked about the increase to taxpayers he agreed that the cost would be an additional $2 billion to the State's General Fund and an additional $2 billion to school districts across Pennsylvania, "per year as far out as we can see."
SOURCE Pennsylvania AFL-CIO