Presentation on theme: "Social Security Reform Implications for State and Local Governments, Public Employees and Public Pension Plans."— Presentation transcript:
Social Security Reform Implications for State and Local Governments, Public Employees and Public Pension Plans
Outline for Today History Social Security reform Mandatory coverage GPO and WEP Political and education issues Outlook for late 2004 and early 2005 How can you help?
History 1935: 1950: 1983: 1986: 1991: Social security excluded public employees Voluntary participation authorized Voluntary withdrawal prohibited GPO and WEP added New hires mandated into Medicare Must cover everyone with Social Security or an equivalent plan
Social Security Reform No significant action on overall reform Privatization Status of trust fund More active on related issues
Senate Finance Committee “Organizations representing state and local employees report their members are often unaware of these provisions until they apply for retirement benefits. The Committee believes the Social Security Administration should utilize the annual earnings statement mailed to every employee over the age of 25 to more explicitly inform state and local employees about the GPO and WEP.
These employees should also be informed about their options to avoid these provisions by electing coverage under the Social Security Program.” [emphasis added]
Government Pension Offset (GPO) Windfall Elimination Provision (WEP)
Education Myth of the new hire Impact on investments Loss of benefits Less money for salaries and equipment Major plan redesign Impact of federal and state deficits
National Issue = Federal Mandate Uncovered employees in all 50 states Over 5 million public employees and their employer 75% of all public safety officers 40% of all K-12 public school employees Segal study: $26 billion GAO study
Political Landscape 2004 election Privatization v. government programs AARP Federal and state deficits Defined contribution pressures Social Security reform; need for transitional funding Health care National security
Hitting Below the Beltway Empower moderates Promote bipartisanship More benefit in drawing distinctions with eye toward the next election than in resolving issues Presidential election year adds another complication Congressional redistricting: greater partisanship Landmark legislation has typically passed when one party has a meaningful majority
You Can Educate members of Congress and staff Educate key state officials Educate individual plan members Build coalitions Update impact information
Message Not just a public employee retirement system issue Undermine established pension plans, ultimately reducing critical benefits Benefit isn’t worth the pain Not a help for Social Security; make it a two- year bandage that carries an undetermined long-term liability; don’t bash Social Security
Make it a national issue Unintended consequences hurt average taxpayer in all 50 states; many states are in a deficit situation and unable to bail out pension funds
Key Louisiana Members Sen. Breaux (Finance) Sen. Landrieu (Appropriations) Rep. Vitter (Appropriations and Budget) Rep. Jefferson (Ways and Means) Rep. McCrery (Ways and Means) 351,000 LAPERS
www.retirermentsecurity.org Coalition to Preserve Retirement Security 100 North Pitt Street, Suite 403 Alexandria, VA 22314 Phone: (703) 684-3601 Fax: (703) 684-3417 Email: email@example.com
Some Parting Thoughts Educate Frame the debate Keep the genie in the bottle
Ten Commandments of Politics Don’t stand in the middle of the road, you will get hit from both directions. Don’t tell anyone to go to hell unless you can make them go. Your friends come and go, but your enemies accumulate. Love your neighbors, you may need them for a coalition.
Speak the truth and speak it clearly and succinctly; on two pages and in short sound bites Respect the power of passion; it always beats good intentions. Never say anything on the phone, email or write in a letter that you wouldn’t want your mother to read about in the newspaper.
Sometimes in the meeting process, the loudest and most persistent voice often prevails; often that person is crazy. Don’t underestimate your opponents; rabbit punches can hurt. When in doubt, do what you think is right; you will please some people and astonish the rest. Twain.