February 9, 2015 – Jacksonville, FL – Tax revenue is up, home foreclosures are down, and, after a long absence, robust economic growth has returned to this sprawling city. But as far as municipal workers here are concerned, it feels as if the bad times never left.
Police and firefighters are on the verge of seeing their retirement benefits cut. Other city employees are certain to be next.
“The city is the one who put us in this position,” said Art Doring, who has been a city firefighter for 10 years. “When the market was great before the crash, they did not make payments into the pension. The chickens have come home to roost, and we are the ones who have to pay.”
The stock market has soared more than 75 percent in the past five years, yet many pension funds, where many middle-class workers should benefit from the market’s rise, continue to struggle, jeopardizing benefits for the workers who were counting on them in retirement.
At the end of last year, Congress passed legislation allowing certain distressed pension plans to slash retirement benefits, including those already being received by retirees — an unprecedented move altering a principle enshrined in federal law for four decades that said benefits already earned could not be cut.
None of the distressed plans have cut benefits — yet. But experts point out that their ability to do so is one more example that promises made to employees that once seemed inviolable can now be easily broken. This change in the social contract is growing more common as employers, private employers as well as governments, increasingly view the mushrooming cost of pensions as unbearable, even as the broader economy recovers.
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