This is an archived article that was published on sltrib.com in 2007, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Utah's public employee pension plan is a thoroughbred; a rock-solid, high-performing $17 billion fund that will carry retirees through the homestretch of their lives. But the state Legislature is treating it like the old gray mare.
If approved, House Bill 377, which would give state employees the option of withdrawing from the pension fund in favor of a 401(k) plan, would be the first step toward sending the traditional pension plan program to the glue factory.
The bill, sponsored by Rep. John Dougall, R-American Fork, is being billed as essential for recruiting and keeping talented employees, young, entrepreneurial types who want to make their own investments and control their own destinies.
That's horse manure. A safe, secure, guaranteed pension fund has always been one of the plums of working for John Q. Public. It's a recruiting tool, and a retention tool, not a deterrent.
Utah's public employees have a pension system that rewards longevity, commitment and dedication by requiring employees to contribute for four years before they become vested. If a 401(k) plan becomes an option, it will attract short-timers and transients, people who are looking to take the money and run instead of paying their dues and acquiring the institutional knowledge necessary to make public agencies work, and work efficiently.
Do you want a revolving door at the police department, and the fire department, and the teacher's lounge? We don't.
We also worry that some public employees will reach for the stars and fall on their faces. If they forsake the safe, traditional guaranteed pension and their investments backfire, they could one day become wards of the state, instead of retired state employees.
And we wonder if the bill's supporters are sincere about their reasons for putting a 401(k) plan into the mix. Is anyone clamoring for a choice of plans? Not a single public employee testified in favor of the bill.
What's really at work here is an attack by a conservative Legislature on a long-standing employee benefit. It's an attempt to follow the lead of private industry and reap a long-term savings in employee benefits instead of making a long-term investment in a stable of competent public employees.
Dougall's bill should be put out to pasture.