Bettencourt is creating a false debate
By Max Patterson
TEXPERS Executive Director
Sen. Paul Bettencourt wants the public to believe that the state
-wide retirement systems are in trouble because of low investment returns and that the solution will cause taxpayers to foot the bill. The truth is, statewide retirement systems and some local pension systems are underfunded because for a number of years the state and some cities did not fund the plans that they approved. These public employers now see this is a problem and some people want to blame the investment market.
In a commentary, Bettencourt talks about a "guaranteed rate of return." There are no guaranteed returns in the workings of any of the defined benefit plans in Texas. There are only targets that funds hope to meet. I suspect that many plan administrators would quickly lower their investment targets. However, the flip side of such a move would force the employer to pay more into the plan, unless the plan was very well funded. Should this occur, Bettencourt could say, “look how bad they are."
There is not a “serious debate under way on pension reform in the state of Texas,” as Bettencourt recently penned in an op-ed. He and some others want to create a debate so they can push their agenda to convert defined benefit plans to deferred compensation plans.
There is an aspect missing from this so-called "debate, the value of public employees. Every day, public employees such as police officers and firefighters perform duties so the rest of us can live in some semblance of peace. We take for granted the good roads we drive on every day that municipal road crews patch and repair. We take for granted the work it takes city employees to clean the water we drink. Others monitor restaurants so we do not have to worry about getting sick. Public employees also keep street lights working and work to keep the state house sparkling clean.
I would contend that when asking the public to place a value on the people who perform these many services they would put them near the top of the list for paying them a decent wage a good retirement after 30-plus years of hard work.
Unfortunately Bettencourt fails to see the end result of his efforts to change defined benefit public pensions. Why are Bettencourt and a few others making it their objective to change the retirement plans of public employees? They are doing it to make sure businesses do not have to pay more taxes. Businesses fear that elected officials will raise their taxes rather than taxes on everyday working people. That is the only reason he and some businesses leaders are going after the retirement plans of public employees.