We might call it “Robbing Peter to Pay Paul.” What else do we name the shuttling of funds in recent years away from our pension system so that those funds can be used for other non-pension projects? At best, we can call it “mismanagement” though politicians seem to prefer the ill-fitting euphemism “Pension payment holiday.” Across the United States, for several years, many city governments have failed to make payments into the pension system, but as the current recession has deepened, this “holiday” is proving problematic.

Did firefighters take a “holiday” from paying into the pension system? No. While we paid what is expected, some of our leaders failed to pay. To add insult to injury, the same politicians who saw fit to skip payments are now turning on us by touting the pension system as a financial drain demanded by over-paid public employees (i.e. You and Me.)  [Harold Schaitburger, IAFF President, on YouTube]

Could any additional salt be poured into this wound? Enter Newt Gingrich. This former Speaker of the House is pushing to allow states to file for bankruptcy--allowing states to dismiss collective bargaining agreements. What happens to our pension system if this happens? It will be converted from a defined benefit plan to a defined contribution plan.

As it stands now, our pension plan allows us a specific amount collected upon retirement based on how long we work and how much we earn upon retirement. The government can’t come in and change it willy-nilly. By converting to defined contribution plan, the money received upon retirement is based on investment returns. You pay into the system, and the government, in essence, gambles that money and hopes for a good return. These days, we might as well pay into our pensions with lottery tickets--at least those are recession-proof.  [The Facts about State and Local Government Pensions]

That’s the tip of the iceberg. If Gingrich’s plan to allow states to claim bankruptcy passes, the domino effect could be immediate. Our IAFF general president, attacking Gingrich’s plan, now warns that it could make it legal to “plunder wages, pensions and benefits.”

And, this time, it’s not just the Republicans on the warpath against firefighter pensions. Tea party candidates, Democrats hoping to salvage votes, and mis-informed voters are joining the front lines. Everyone seems to ignore the fact that the government, with its “pension payment holidays” is to be blamed. Instead, IAFF members are scapegoats and our pensions are now called “out of control” and our benefits deemed “outrageous.” These are the kinds of words that will lodge in voters’ minds like an arrow in this era of scaling back.

The irony of all this? The vast majority of cities are funding their pension systems without problem. Nonpartisan study groups indicate that our pension funds still have 2.7 trillion in assets that are held safely (for now) in trust. But what politician wouldn’t love to tap into that money or take a “holiday” from funding local pension systems. President Schaitberger assures IAFF members that “drastic pension underfunding is the exception, not the rule.” But how long can we expect it to be the exception? And how long can we afford politicians to use our pensions as an “example” of government waste? Will Newt Gingrich’s federal pension be affected by his own policy push? You guessed it: no.

This may well be the fight of our careers ahead and the IAFF may soon be defending itself against Democrats, Tea Partiers, Republicans, and the growing number of voters buying into their vilification of us.

IAFF USA TODAY Ad

The IAFF Fights Back Against Attacks on Pensions

-- AKM