Pension costs are an enormous problem - for companies and governments alike. Money dedicated to covering pensions is money that can’t be spent on government services.
But taking on pensions is difficult, legally and politically. The law is clear that existing pensions for government workers can’t be touched. And proposals to create less costly retirement benefits for new government workers have been easily defeated by unions who argue that such reforms are attacks on popular public employees: teachers, police officers and firefighters. When Gov. Arnold Schwarzenegger offered such a proposal in 2005, he was accused of bullying cops and firefighters -- and suffered a rapid drop in popularity.
Which is why the above sketch from this weekend’s Saturday Night Live was jarring. Public employee pensions would seem to be the kind of subject that comedians would avoid. But by airing this sketch, the folks at SNL made the calculation that public employees and their benefits are now ripe for public ridicule. If true, this may be the moment to take another swing at pensions.
A January poll from the Public Policy Institute of California bears that out. The percentage of Californians who view money spent on public employee pensions as a “big problem” is up to 41 -- that number has grown by 10 points over the past five years. And two-in-three Californians in the PPIC survey favor changing the pension system for new public employees to a 401(k) style plan—with defined contributions, rather than guaranteed benefits as in a pension plan.