Current proposals are being floated to do away with “defined benefit” pension plans for state employees and replace them with “defined contribution” plans.
A “defined contribution” plan is an employer’s convenience, reminding folks it is a good idea to set aside some of your own earnings for future use. The government that “provides” this plan does little more than allow employees to use some byways of existing laws to help themselves. It costs little to nothing to offer it and little harm results from employers taking credit for an employee acting in a responsible manner.
This plan may be good, but there is harm in replacing that orange of “contribution” with the apple of “benefit.”
A “defined benefit” plan is an honest employer’s statement that increasing years of service are recognized as a valuable asset to the employer. It is a promise saying “you could get more money elsewhere up front, but stay with us and we’ll pay at least as much in the long run.”
Some want you to forget two facts: The benefit being defined is pay that was already earned and held aside for decades, but it also was held as further inducement for continued service.
Defined benefit is a social contract. In a civil society, rules and laws, expectations and rewards are anything but arbitrary. Now there is far too much talk of not living up to our word. There is an honorable course to take. It begins by recognizing and respecting the promises we’ve made.