Dan asked for copies of bills that eliminate death benefits for public employees in a comment to a recent post, so here it is:
HB7011 eliminates the pension plan for all employees hired after January 1, 2013. This includes death and disability benefits to cops, firefighters, and EMTs that are disabled or killed in the line of duty. From this article:
Closing the current pension plan would also end benefits such as life
insurance or death benefits if employees are hurt or killed in the line
of duty. Rainey said death benefits of a newly hired firefighter killed
in the line of duty under the 401(k) plan could offer his or her
family less than $1,000.
Here is the FOPs opposition letter to HB7011 (pdf warning)
Not only that, but the system as is requires no tax increase, but switching to a 401(k) system will force the state to contribute money to the system to fund the pensions of those already retired, which will require tax increases.
Bob S. · April 23, 2013 at 4:22 pm
I may argue about unions and pay but I think that the removal of the death benefits is ridiculous.
Death and disability benefits should be a basic part of the compensation package for employees in dangerous professions; not so much for the
Changing from pension plans to 401(k)s isn't a huge issue in my opinion. Just an adjustment is needed in base wages if anything.
Dan · April 23, 2013 at 5:00 pm
Ah, I see — so it's an attempt to remove pensions in favor of something a bit more modern. Pensions are an anachronism, and public employee pensions are pretty much screwing the states and localities that are holding on to them. Sorry, but that's just the way it is. As long as the pensions aren't just tossed out — that is, that no money is put into the 401(k)s or 403(b)s of the public sector employees, it seems perfectly reasonable.
Death benefits aren't normally part of a retirement fund — that's what life insurance is for. Any organization that gets rid of the pensions will no doubt need to replace the death benefits with some form of life insurance if they want to attract and keep their employees.
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