TLP: On the Other Hand, Sometimes You Can't Retire Too Soon
Those government jobs just aren't what they used to be. Furloughs, IOUs and increased scrutiny of the cost of public employees. Now, a growing number of state governments are instituting requirements that new employees work longer before being able to retire with full pensions.
The change comes as foreign governments from France to Morocco have either decided to increase or are contemplating a rise in the age at which private and public workers can receive government pensions.Chalk it up as another one of those things that most people never gave much thought to when things were good. Most of all, state workers probably never thought the sweet deal would turn sour. Of course, as always, it could be worse. For some government workers, retirement comes extra early.
A federal commission studying long-term U.S. fiscal issues is also entertaining the idea of changing the retirement age as one way to shore up Social Security, said a person familiar with the matter. A report is due to President Obama in December.
Individual states, meanwhile, are moving ahead as they respond to the widening gaps between the obligations made to workers and the money expected to be available to pay them, thanks to investment losses and recessionary budget pressures.
"It's a very positive change that the age for receiving full benefits is increasing," said Alicia Munnell, director of the Center for Retirement Research at Boston College. "Increasing the retirement age is the single most important thing [states] can do" to tame future pension costs, because it reduces the number of years the state is paying a benefit, she said.
Though lengthening lifespans have been expected to pressure pension systems, the looming fiscal predicament has emboldened lawmakers to demand more years from employees. Also, as many American states cut services, scrutiny has fallen on the compensation of public workers.
In Illinois, where state lawmakers voted in March to increase the retirement age for most new hires to 67 from 60, "it had everything to do with the financial straits the state is in," said Tim Blair, the executive secretary of the State Employees' Retirement System of Illinois. "The scales have tipped."