Issues concerning pensions are getting a lot of publicity these days. In the popular mindset, pension plans persist mostly in the public sector. To the extent that’s true, it’s because private companies have largely been let off the hook as far as any moral obligations towards their employees in retirement. In the interest of full disclosure, I am a public employee.
Let’s remember what pensions are about. It is a way for workers to secure their financial future in old age/retirement. The deal with the employer is the employee puts out effort to secure good profits for the employer. The employer saves some of those profits to pay to retirees later. Everyone, including the economy in general and families, benefit instead of having wealth accrue in a very limited number of people’s hands, with an overwhelming majority facing an impoverished old age.
A lot of people are incensed by public sector employees’ (PSEs) pensions when they as the taxpayers (which, ironically, also include the very same PSEs) don’t get a pension from their employers. Let’s call this “pension envy.” Of course they forget that civil servants don’t get Social Security unless they’ve also worked in the private sector. Even then, the payments such a person gets are less than what someone who has worked exclusively in the private sector receives. This pension envy misses the point—EVERYONE working for a large enough company should get a pension, as used to be the case before we allowed the super-rich to befuddle voters into electing legislators who would do the bidding of the moneyed and corporate elites.
That being said, it is probably also true that some adjustments may need to be made in existing pension formulas. The delusional exuberance created during the times of the various financial bubbles that have plagued the economy and society over the last decade-plus led to improvements in pension arrangements that probably should be readjusted. But this should not lead to even more, and varied, tiers of pension contributors. Also, universalizing reciprocity among the different retirement/pension funds and eliminating double dipping (working for one agency while collecting a pension from the retirement fund of another from which that person has retired) would help the situation.
Then there are cases where government agencies, instead of making the required annual contributions to the retirement funds, took advantage of investments’ increased valuation as their “contribution.” Or, there has been outright underpayment into the funds. This has led, at least in part, to what’s referred to as “unfunded liabilities.” That means that after the actuaries do their calculations as to how much money should be in pension funds NOW to be able to pay retirees IN THE FUTURE, they discover that there’s not enough money available. Clearly, this is not something that the workers should be penalized for.
The question of pensions fits in very well with numerous other social-financial problems modern societies currently face. It all comes from the very well-organized effort commencing in the 1970’s to roll back the gains made by society allowing people to live a more decent life. That tide is now high. We must organize to make sure it crests, immediately, then recedes. Otherwise our dignity as humans will become ever more compromised, and along with it, our ability as Armenians to contribute time and money to our beloved Cause.
Garen Yegparian
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Very good article. This is a serious topic. I am afraid the trend is not in favor of the workforce.
I wrote on the same subject back in January 2006.
http://thissideoffifty.blogspot.com/2009/01/january-2006-retirement-of-pensions.html
Our perspective overlap a bit and differ here and there. Reading both might provide for an interesting exchange here.
All the best,
Mark
This article has virtually nothing to do with Armenian affairs or Armenian causes, except this: Employees these days have to be masters of their own retirement destiny, and not depend on anyone else to do it for them. Likewise, we Armenians cannot do what we have done for centuries–that is depend on someone else to do it for us. Self-reliance is the key, not only for today’s workers but also, and especially, for Armenia and the Armenian people.