MY HUMBLE RETIREMENT FROM THE PRIVILEGE OF PUBLIC SERVICE

SAN DIEGO, CA -- In my opinion, retired state employees aren’t living it up but they certainly are getting by –which is more than you can say for the next generation.

I’m a Baby Boomer born in October 1947. My parents, who grew up during the lean years back home in our beloved old country – the Philippines – told me that financial security, especially in retirement, should be the most important goal of my working years. I listened.

And so, though I’m not rich or famous, as a soon retiring California state worker, my wife and I are reasonably secure. I will be getting a modest but safe state pension which, coupled with Social Security and Navy retired veteran’s check, generously gives me more than enough of what I made while working. That keeps food on the table and the wolves away from our door. I will also be getting good health care coverage through a comprehensive Kaiser Medicare Advantage plan coupled with state paid supplemental benefits.

You may perhaps have heard that the retirement costs of workers like me are a fiscal problem for the state and the country. I say they are not. The real issue is the opposite. I’m actually becoming a rarity.

Yes indeed, fewer and hardly any workers can expect or aspire to the satisfactory retirement I will be having. Statistics show that the number of people receiving secure pensions has been in decline for at least 40 years now; the quantity of pension plans of any sort today is just a quarter of the aggregate was in 1984.

Retirement security decreased sharply in the Great Recession, in 2008 and just after, when Americans on the verge of retirement – ages 55 to 64 – lost a third of their net worth. Younger boomers were off the right track even more. Today, over 23 million Americans who are 60 and older are economically insecure, living at or below 250 percent of the federal poverty level. Five years ago, only one in five private sector workers enjoyed the sort of traditional defined benefit pension plan that supported our parents and grandparents for as long as they lived. Today, as companies eliminate such schemes even more rapidly, the number is down to one in seven.

The outlook for the future is even bleaker. Back in 1991, half of all American workers planned to retire before they reached the age of 65. Today, that number is 23 percent.

In 2008, the U.S. Government Accountability Office (GAO) reported that half of all companies that still have the old, secure defined benefit pension plans are freezing them and forcing newer employees into much less locked delineated contribution programs. The GAO predicted that the remaining secure private sector pensions would be gone within a few years. And then there’s Social Security, which makes up about 38 percent of total income for the elderly, and for 1 in 3 retirees, it is their only compensation source. Moreover, the Social Security fund will be exhausted within decades. After that time, contemporaneous money paid into the purse will be enough to pay only about 75 percent of benefits. As Social Security’s most recent annual report warns the window for making changes to stabilize the savings is small and closing soon. All of this spells a cold, hard old age for our children and grandchildren.

The reality of that cataclysm hit home to me not long ago when my wife and I were waited at a fast food place by a sweet old lady perhaps my wife’s age or maybe even a couple of years older than my wife and I both were. I imagine her salary was not much above the federal minimum wage for nonexempt employees, say $7.25 an hour. (Conceivably I’m wrong and she owned the franchise, but she looked frail and arthritic and hardly appeared to be the boss.) Those are poverty pay and I would shudder to think that my fellow Boomer retirees are headed for a similar existence.

Public employees have not been spared from the attack on their retirement security. The pensions of those of us who served the public are increasingly at risk. Recent polls show that here in our state of California, many people, alarmed by supposedly common $100,000 retirement accounts now believe that public pensions are way too large and that those payments threaten the solvency of state government.

In reality, 98 percent of public retirees barely get by on modest pensions. Half get less than $1,500 a month and many – teachers and public safety workers among them – do not even receive Social Security.

One would think that private sector workers, having seen their own retirement accounts trashed, would stand at the barricades along with public employees to protect collective annuities, if only to rebuild support for secure pensions as a whole. Instead, antipathy toward public laborers seems on the rise.

Who’s hurt? I say, minorities, for one. Black Americans are 30 percent more likely to be public employees than any other race. So, let public pensions shrink and Black Americans will be disproportionately affected. The same will almost certainly be true for Latinos, whose retirement savings are about half of those of non-Latino whites.

On the other hand, Asian Pacific Islander Americans (Filipino Americans included) were or near parity for civil service employment rates. At the same level, Asian Pacific Islander Americans were reported to be the second most underrepresented group, though it has been noticed that they appear to have been able to penetrate the highest quality jobs.

Jesse T. Reyes

Filipino Potpourri

Also, despite the notion that Asian Americans are the “model minority” there is no evidence that they are currently overrepresented in the total civil servants workforce.

Finally, here comes the issue of OPEB, or Other Post-Employment Benefits, particularly health care. Here is where my own greatest concern lies. While my pension is secure for the foreseeable future, my health care coverage could be revoked at any time. It is at the mercy of our elected leaders and the voters. Like most public employees in the U.S., California does not set aside money in advance to cover health care for its retirees. It is pay as you go. The state budget has recovered from the awful effects of the Great Recession, but nothing says that we won’t face another similar fiscal mess. If so, nonguaranteed costs like retiree health benefits could be among the first things tossed overboard. National estimates of unfunded public retiree health costs run from $1.2 trillion to $2 trillion.

In January of 2015, in a unanimous decision, the U.S. Supreme Court threw out previous pronouncement guaranteeing vested lifetime health benefits for retirees and sent the issue back to a lower court to determine how or even if such a lifetime guarantee should apply. Few private employers provide such coverage and the decision is likely to end even that. Public sectors may fare little better. Here in California some state workers with sufficient service credit at retirement now receive full employer paid health coverage. Because of the Supreme Court’s action, such continued coverage is likely to be a significant bargaining business in future contract negotiations.

In that same time frame, a piece in the periodical San Francisco Chronicle noted that the Affordable Care Act may be the savior of retiree health benefits. Governments could simply eliminate their retirees’ health benefits and instead give them a subsidy to buy health coverage under Obamacare, thus turning a program to ensure all Americans have health coverage into a bailout for strapped or fiscally irresponsible governments. For instance, the city of Detroit in the mid-western state of Michigan then, as part of its bankruptcy plan, stopped providing health care to retirees not yet eligible for Medicare, the Chronicle noted, and instead gave them each a stipend to buy insurance in the Obamacare exchange. I presumed that other cash-poor governments likely followed suit.

Consequently, I conclude my very own pension is probably not at risk. The California Public Employees Retirement (CalPERS) fund is solvent and well-managed. I qualified for Medicare and the small additional amount the state pays for my Medicare supplement is affordable for it. But I fear greatly for those coming after me. I certainly do not want, in my senior years, to have to see oldsters from Gen X and beyond (my children and grandkids specially) flipping burgers to supplement their meager retirement savings. Or worse, facing what Shakespeare described in “All the World’s a Stage”: “Mere oblivion, sans teeth, sans eyes, sans taste, sans everything.”

And he might have added, sans health care and pension, too.

What advice I can honestly give about retirement?

I say plan ahead. Be informed. Talk to other people. I think getting involved is a good way to organize, as well. Explore activities that you have an interest in so you can leave your job and get into these things outside of work. Be active because that’s so important.

And if you have any baggage, let it go; retirement is about enjoyment! At work you think “who’s going to do this when I leave?” – But actually that’s all in our heads! Everyone is expendable, nobody s irreplaceable…Nobody!

Having a pension has made a world of difference for me. I am very fortunate to be part of a healthy and supportive pension plan. Prepare now while you’ve got the time.

That said, I say lastly make sure that your best years are ahead of you rather than in the past…Ha-ha-ha-ha! What say you?