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My Turn: Pensions for public workers not a gift but a promise

New Hampshire Supreme Court Chief Justice John Broderick talks about changes he would like to see in the justice system during a meeting in his office in Concord, N.H., Wednesday, Sept. 22, 2004.  In a report released Wednesday, the high court calls for greater accountability and public access, consistent sentencing and enforcement of orders, ``customer service'' training for all judges and court staff, and clear rules _ including those involving conflicts of interest, the issue that drove the impeachment investigation in 2000. (AP Photo/Jim Cole)

New Hampshire Supreme Court Chief Justice John Broderick talks about changes he would like to see in the justice system during a meeting in his office in Concord, N.H., Wednesday, Sept. 22, 2004. In a report released Wednesday, the high court calls for greater accountability and public access, consistent sentencing and enforcement of orders, ``customer service'' training for all judges and court staff, and clear rules _ including those involving conflicts of interest, the issue that drove the impeachment investigation in 2000. (AP Photo/Jim Cole)

There is talk these days in New Hampshire and elsewhere about reducing retirement benefits for public workers in order to address state budget concerns. The phrase “penny wise and pound foolish” comes to mind.

Some seek to increase the costs paid by teachers, firefighters and police officers for their pensions. Others seek to reduce or delay the amounts ultimately received by these workers when they retire. Still others would begrudge them the right to receive their pensions at all, arguing that workers in private industry generally do not receive pensions.

It’s not that making budgets balance is not important. It’s just that changing the bargain made with state employees after the fact isn’t fair.

I think we all recognize the need to attract skilled workers to New Hampshire. We have good initiatives such as Stay Work Play New Hampshire because we need young people to choose New Hampshire as a place to settle and eventually raise their families.

Nationally, about 15 percent of all nonfarm workers are public employees. These employees teach our children and prosecute crimes. They are the first responders we so respect when we hear of their selfless sacrifices. They comprise an important aspect of our workforce. They are highly skilled and contribute to the success of the communities in which they live.

Why wouldn’t we encourage young people interested in public service careers to move to New Hampshire?

I work closely with young people beginning their legal careers. What my young colleagues want is similar to what motivates young workers starting most careers. They want work that is inherently interesting, they hope to achieve a degree of success in their jobs and they want jobs that allow them to reliably provide for their families.

It is this last component that is implicated by the current debates. According to the New Hampshire Retirement System, most public workers in New Hampshire have paid a consistent rate of contribution to their pension funds for many years. Employees in the system reliably paid these contributions and planned their finances accordingly.

In 2011, the law was changed to increase employee contribution rates as much as 20 to 25 percent. Similar promises by the state to local communities to share the costs of retirement benefits also underwent dramatic change as the state discontinued its cost sharing.

Many state workers make the decision to trade higher private sector pay for retirement benefits not commonly available in the private sector. That’s a fact of life everyone has known for years.

In most cases, it has been a great benefit to the state. I know from my years in the judicial branch that we were fortunate to be able to hire some highly talented staff because of state retirement benefits. Research completed at Boston College and elsewhere shows that public employees suffer a wage penalty. They earn less than their counterparts in the private sector, but this amount is just about made up by pension benefits.

I grew up in a world where a deal was a deal. If public retirement benefits are changed or withdrawn for employees already in the system, we will lose our ability to attract new employees to public jobs. Uncertainty is not our friend.

Other states have addressed this concern by making changes prospectively; that is, only having them apply to employees who join the public workforce after changes are adopted into law. At least that puts people on notice and honors expectations.

At the end of the day, I don’t think it’s fair or just to change the rules after the game begins. New Hampshire is a special place where public commitments have meanings. We should honor them.

(John Broderick Jr., a former chief justice of the New Hampshire Supreme Court, notes that the views expressed above are his own and not necessarily those of the University of New Hampshire Law School, where he serves as dean.)

I would also like to see these retirement funds (now called "entitlements" by those trying to villianize those who have worked hard for decades.) go to pensioners. The problem isn't "right" and not fair. Same was true when the feds raided the SS funds - repeatedly. However, there was no outcry then. Yes - would like to see public workers get their retirement funds - would like to see all of us who have worked hard and put big $$$s in the SS system, get fair return on their investments. However, I also know there can't be some magical shield that protects public services workers from the national economic issues that the rest of the country cannot escape. Safety services and teachers aren't the only ones who have worked hard, put hard-earned resources into "the system". Would it be fair & right to insulate them from unwanted economic downturns at the expense of others just as deserving?

""changing the bargain made with state employees after the fact isn’t fair"" I could agree 1000% with this. Except, no one from the State/Fed government complained when private companies started doing the exact same thing years ago. Private companies made promises for decades, when it came time to pay the promises they chose to "change the rules". The State/Fed government allowed private business to do it, so they lose the right to complain when the citizens say it is OK to change the rules for the government worker.

good post

I can see your side here, I can't say that I totally agree, but you make a point. I have been scolded that 2 wrongs don't make a right. The underlying problem is the driving forces behind public and private jobs. Private jobs are profit driven and that has become an issue for many. Cutting jobs and benefits increase profits, simple. Public jobs on the other hand are service based and it's not a simple case of cutting services because of economic issues. To be fair it does happen but it's always the lowest paid that get the ax. Actually, the need for services rise at times like these. To stretch the issue even further, the "I lost mine so they should lose theirs" argument really fails because we would have needed more regulations and laws to keep businesses doing the right thing and it's common knowledge that business knows what's best for it, right?

GC It really is not a "I lost mine so they should lose theirs". It is a "if it is OK to happen to the private sector then it is equally OK for the public sector." If a company or a "gov" made agreements for 20/30 years than they should follow through, THEY made the agreement. Both groups can start new agreements because those coming in know the new agreement, hard to change retirement plans after you already worked the 30 years.

There are two comments I have about this. Private job holders would disagree with you that their jobs are "profit driven". If you knew some of the profit margins for industries like supermarkets (1-3% profit), you would understand that they need to be huge to make any profit. Sales do not necessarily translate to profit and profit is required as it translates into capital to grow larger and develop more jobs. Unless you have worked for a Fortune 500 company as an executive, you probably would not understand. My second point is that Public jobs are "service" jobs, they "serve" at the will of the taxpayers, who may, at any time decide that they don't necessarily need those services as it is economically unviable. "Services" such as Safe Routes to School in NH are unnecessary as we need to ask if that money could be better spent. Perhaps on school lunches, health care or other services. Moreover, where private jobs are based on making some kind of profit, they also are built around efficiency, productivity, etc. Public jobs are notoriously known for minimal work hours (37 hours in NH) and government bureucracy "adminnistering" monies inefficiently. NH may be better than other states but the fact is that government is layered and wasted.

Excellent column.

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