Pat McDonald: Legislative Pension Task Force should ask tough questions about public compensation

This letter to the editor is from Pat McDonald, former Commissioner of the Vermont Department of Human Resources and the Department of Labor.

Dear Editor,

On November 10th Campaign for Vermont (CFV) held a press conference to review the details of its report entitled The Public Sector Reality. For the record, I am the President of the Board of Directors of CFV. Over the past months of pension discussions at the Legislature we heard claims about the state’s non-competitive wages and we decided to verify those statements. We set out expecting to find that pension benefits were an unquestionable asset to recruiting and retaining our public sector workforce. What we found surprised us.

Here are our key findings:

1. The average public sector employee is in the top 25% of income earners in Vermont, even before you consider health benefits.
2. On average, employees make nearly $12,000/yr less in the private-sector vs. the public-sector.
3. The average private sector employee makes at least $20,000 less per year in retirement than a public sector employee. This disparity likely grows when health benefits are considered.
4. Wages for public sector employees have grown faster over the past 20 years than private sector employees. And, over the past 30 years (as far back as we have data) private sector wages have consistently lagged the public sector.
5. The problem is going to get worse before it gets better as nearly 20% of state workers are approaching retirement.
6. The extraordinary benefits offered to public sector retirees may not be necessary to compete for qualified workers.

CFV hopes that having this information will help the Legislative Pension Task Force to ask the tough questions about the total compensation of public employees that are necessary as they set about making the changes to address the State’s current $4.5 Billion pension liability situation. We will continue this important work to better understand the value proposition of our above average benefit options. CFV values our public employees and do not want to break our promises to them, but we do need to make changes that safeguard the long-term stability of our pension funds for future generations.

Check out the report.

Sincerely

Pat McDonald
Berlin, VT

Image courtesy of Public domain
Spread the love

4 thoughts on “Pat McDonald: Legislative Pension Task Force should ask tough questions about public compensation

  1. Fiscal responsibility is another issue that it would be good for those running for the legislature to focus on. The simple fact is that left unaddressed, the pension crisis will end up either bankrupting the state or destroying the pension system.

    The current Democratic leadership this past session once again kicked the can down the road despite the warnings and modest suggestions for change made by State Treasurer (and a Democrat) Beth Pearce. This inaction has resulted in another around 100 million added to the pension deficit.

    While it will be interesting to see what the study committee they set up comes up with, given the stranglehold the teachers union has on the legislature and their record of defending their members benefits no matter how they effect the public good, it is unlikely any meaningful action will be taken.

    • John……I agree with you again. But hope that meaningful action will be taken, a need that has been repeatedly emphasized over the years by some of the best minds in the state.

  2. Average hours worked a week & year public versus private ?
    Length of career ?
    Age of retirement ?

    Bob works 40 hours a week, 50 weeks a year = 2000 hours a year for 45 years = 90,000 hours

    Bill gets a government paycheck.
    5 weeks vacation
    10 holidays
    10 personal days
    Retires younger.
    Based on the mythical 40 hour work week, 43 weeks a year = 1720 hours a year for 40 years = 68,800 hours

    Lifetime compensation an total number of hours worked during their careers ?

    Than there is the off the job work load.
    Bob can’t afford to pay people to wait on him hand & foot. He does his own yard work including snow, fixes his old car while the service industry workers wait on Bill hand & foot. Bob dies in his 60’s after a life of grueling blue collar work and never collects much retirement money. Bill lives into his 90’s.

  3. Pat McDonald is a smart, experienced, tough, no nonsense executive…….Her advice must be heeded. I have observed her work first hand while working in the Douglas Administration from 2003 to 2008 following my private sector career……She know’s what she’s doing and talking about.

Leave a Reply

Your email address will not be published. Required fields are marked *