State Employee Benefits

A question was posed yesterday concerning retirement benefits for MO Legislators.  The Missouri General Assembly Legislators, by design, are part-time positions only.  Their yearly salary is capped at $31,000 per legislative year.

As a part-time legislature, compensation is low with the General Assembly, and most senators and representatives hold jobs outside their legislative duties. Law makers are paid $31,351 per legislative year. — Wiki

The legislators are term limited to eight years as a Representative and eight years as a state Senator.  A total for any individual of sixteen years. The question is whether Legislators should receive a state retirement.

No.  The Missouri Constitution clearly states that Legislators are part-time.  The office is not designed to provide a “living wage” nor should it be.  Legislators should be in office to serve the state and their constituents, not to be served by the state.

Almost immediately, another asked if that retirement ban should extend to other state employees and to police and firemen.  My opinion to both is a qualified, “Yes.”

Many (most?) corporations across the country no longer provide company retirement plans.  They have switched to 401K plans with some degree of matching employer funds.  For those who don’t know what a 401K plan is, it is an employee savings plan where an employee can save for retirement and not be taxed on those funds until they are withdrawn at retirement.  Most employers will contribute, to some degree, “matching funds” to those plans. The amount of contribution can vary from zero to one hundred percent match of the employee’s contribution.

Over a period of years the 401K fund can grow quite large.  If an employee moves from one job to another, he can take those funds with him and continue to contribute to them at his new job.  For me and those whom I worked with, the 401K plan has worked very well.

Only those corporations saddled with unions still have a company retirement plan. In some states, even those pension plans are shifting to 401K plans.  Public service employees, like unions, still balk and ignore this trend.

As a recently retired engineer, I know what it is to work toward a goal of being independent in retirement.  I’ve  planned my retirement through most of my working life. I admit it’s not as big as I would have desired, but my plan has worked well enough.

One of the contributors of the discussion stated that without a retirement plan, a state provided pension plan, no one would want to be a state employee or a Police Officer or Firemen.  For the latter, if a retirement plan was their motivation of joining the Police or Fire Departments, they are in the wrong profession.

But that argument still exists for some.  In truth, the state can no longer afford state provided pensions.  The individual must take responsibility for his future.  What the state should do is to provide the tools to allow the employee to make his own decision: ignore the situation as many do, or use those tools to create a personal plan and the mechanism for the employee to fund that plan. The responsibility of the state ends there.

The corruption of state pension plans, driven by public service unions, must end.  We know the farce of the Wisconsin state pension plan where the state provides the funding and the union member contributions go to the union central committee to be used for political contributions to liberal and socialist organizations. That is nothing more than theft. It is misusing public moneys to fund a plan while the so-call individual contributions are siphoned into political contributions for the democrat party.  If that isn’t a criminal act, it should be. 

States can no longer provide cradle to grave support for their citizens as they can no longer provide such services to their employees.  People and employees must manage their futures independent of the State.  The argument that the lack of pensions and other state-provided benefits will prevent people from filling state positions is as false as the idea that the State must provide universal healthcare. The concept doesn’t work nor can we afford the expense. 

The day of personal responsibility must return. The proper role of the state as an employer is to provide the tools and, perhaps, mechanisms for the employees to create their own futures.  The day of the state management of personal benefits is over.  Let’s move forward with plans that reinforce personal responsibility instead of state dependency.