Title:
Future Payments for Retirees Are Big Issue Now for
US States
Description: This is
a VOA Special English Economics Report.
See text below
Text:
State and local governments across the United States
are facing big budget deficits. Many of these
shortfalls include promises of future retirement
payments for public employees. Several states have
had to borrow money for pension plans that have
fallen below required funding levels. Pay and
benefits for public workers have been a target as
state and local governments try to cut spending. At
the same time, there are efforts in several states
to reduce the negotiating rights of public
employees. In many cases, public employee unions
have agreed to accept lower pay. But they oppose
efforts to limit collective bargaining. An effort by
Republicans to do that in Wisconsin led protesters
to occupy the state capitol building. Almost every
state requires a balanced budget. Yet worries that
state and local governments might not be able to
repay their debts are now adding to the costs of
borrowing. Illinois had to offer a high return of
nearly six percent on bonds to be repaid by twenty
nineteen.Experts say, on average, public employees
are paid less but have better benefits than workers
with similar skills in private jobs. However, they
say these differences in labor costs are a lot less
than some people think. Still, traditional pension
plans pay a set amount for as long as a retiree
lives. States like Georgia, Michigan, Colorado and
Ohio are considering a change for future employees.
They might offer retirement plans similar to what
are called 401(k) plans.These are a common form of
plan offered by private employers. Employers and
workers both put money into the plan. Workers can
invest the money in stocks or bonds. Their
retirement savings are defined by the return on
their investments in the plan. Federal workers
already have a savings plan similar to a 401(k).
John McGlennon heads the Government Department at
the College of William & Mary in Virginia. He says
the economic crisis of two thousand eight continues
to affect state and local tax collections. Also,
many pension funds have less money because their
investments have yet to fully recover from the
recession. But Professor McGlennon says things could
change.He says states might not be in good financial
condition in the next few years. But they usually
recover more quickly than we think they will. For
VOA Special English, I'm Carolyn Presutti.
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Hi. I
personally reviewed this video and found it appropriate for
the news section of English Global Group. This
is a Voice of America video which covers an interesting
topic in Special English. I would appreciate some feedback from both
students and teachers about this video. You can comment in
the window below using any of a number of different services
including Facebook, Yahoo, AOL, and Hotmail.
