It is understandable that teachers and other state employees want to fight a proposal in the Kansas Legislature to move their retirement system from a pension plan to a 401(k)-style plan.
However, they should be careful not to seem out of touch with current financial realities.
Recent comments surrounding the 401(k) discussion have left some observers questioning whether state employee groups fully understand the challenges facing private sector employers and employees.
For example, a March 8 Associated Press article quoted a lobbyist for the Kansas Organization of State Employees. “Do you really want to take your retirement security and gamble it on the stock market?” the lobbyist asked while opposing the 401(k) plan.
That, of course, is what many private sector workers do each day. It is not that private sector workers necessarily want to take that gamble, but for their employers, traditional pension plans are quickly becoming nothing more than a memory of a different time. In an era when profits are highly unpredictable, especially for small businesses, it is unreasonable to expect a company to offer a pension plan that guarantees a certain retirement income regardless of what else happens in the economy — or in the stock market, where many of those pension funds are invested.
Whether the state should move to a 401(k)-style retirement system is a question that requires more study. The details of how such a switch would be made and how the state would finance it should be carefully examined. It is a complicated and important issue.
We expect the leaders of state employee groups to remain engaged and closely follow the process. But we hope that they will do so in a way that acknowledges that private sector workers already have had to adapt their retirement strategies to new economic realities.
If leaders of state employee groups maintain their current rhetoric, dwindling pension funds won’t be their only concern. Public sympathy will quickly dwindle as well.