Texans for a Conservative Budget (TCB), a coalition that includes the Texas Public Policy Foundation, yesterday laid out a roadmap for righting the state’s fiscal ship in 2013 and beyond. Most of our recommendations consisted of pretty straightforward ideas, like cutting out waste, fraud, and abuse in state agencies; making the budget easier for taxpayers and lawmakers to read; and beginning to find savings now. But one recommendation – public pension reform – seems to need some elaboration.
In an article from yesterday’s coverage, the Dallas Morning News had this to say about our public pension reform proposal: “Leaders could achieve at least $9 billion in savings through 2015 by revamping teachers’ and state workers’ pensions and again making significant reductions in per-student spending in public schools, higher education and social programs…” [emphasis mine] Later on in the same article, the proposal is given a little more airing with the note that we believe that “…Texas needs to move public-sector workers away from traditional, defined-benefit plans and into 401(k)-style retirement savings plans.”
Though what was reported is technically true, there may be an implication that the Foundation and its allies want to restructure Texas’ public pension system in such a way that current state employees and teachers will be left out in the cold by a transition away from defined benefit plans. That’s simply not the case.
Verbatim from our research report:
-Move future state employees into defined-contribution retirement plans. To protect taxpayers and state employees, future state employees should be incentivized to move into a defined-contribution 401(k) plan, the same plan the vast majority of non-government workers use.
The truth of the matter is that we do want to see the state’s public pension systems revamped, but not in a way that breaks the state’s promise to current state workers, teachers, or retirees. That’s why we’ve limited the scope of our proposal to future public sector employees.
-James Quintero