Federal takeover of public pension plans?
04/18/2014 9:04 AM
04/14/2014 11:12 AM
Re "California needs substantial pension reform" (Viewpoints, April 13): State and local government administrators and public employee organizations that refuse to acknowledge current public pension plan benefit formulas are unsustainable and who resist any modifications should consider the fate of private pension plans in this country.
Widespread problems with business corporate and union pension plans led to the enactment of the federal Employee Retirement Income Security Act of 1974 (ERISA) which preempted all state private pension plan laws and created the Pension Benefit Guaranty Corporation to takeover failed plans. That agency has had to dramatically reduce pension payments on many occasions.
When California public agencies can no longer perform basic services because of the cost of employee health and pension benefits, in addition to present federal bankruptcy, there will be pressure to find another federal solution similar to that created for private pension plans. Under that circumstance public pension plan participants will surely regret their obstinacy
-- Gerald Ross Adams, Sacramento
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