March 17, 2015

JOBS WHITE PEOPLE WON'T DO:

Pension Fight Comes to a Head in Memphis (TIMOTHY W. MARTIN, March 15, 2015, WSJ)

Last July, half of the police officers walking the streets and patrolling neighborhoods in this city of 650,000 called in sick as they protested reductions to their pensions.

The "blue flu" established Memphis as a new axis in the struggle to shore up underfunded retirement systems across the U.S. Now, the city's police officers and firefighters are doing more than just calling in sick--they are quitting, en masse.

"I can't justify me putting my life on the line, and not knowing if my family would be taken care of," said Joseph Vaughn, a 35-year-old Memphis native who quit his hometown fire department last month for a lower-paying job in Alabama because it has a traditional pension. His defined-benefit pension plan in Memphis would have changed in 2016 to a new hybrid that is designed more like the retirement accounts in the private sector.

Many states and cities are facing pushback from workers as they seek cutbacks on pension entitlements to existing employees--not just new workers or retirees--as they try to control their budgets and fill pension gaps. But Memphis is particularly notable because workers have moved beyond rhetoric and into action. More than 250 police and firefighters have quit and new recruits are proving difficult to attract, after Memphis opted to end its traditional defined-benefit pension and cycle a portion of retirement benefits for many current employees next year into a 401(k)-style account.

Posted by at March 17, 2015 8:14 PM
  

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