Letter: Save for pensions during good times
2008 -- Stock photo of an old-fashioned gold watch resting on a Benjamin Franklin, $100, one hundred dollar bill. Photo credit: istock Credit: ISTOCK/
Newsday's cover story makes it appear that the exorbitant rise in pension costs is solely due to losses experienced in recent years by the pension funds when stock prices retreated ["LI school administrators pension spike," News, Jan. 29]. In a simplistic world, that is true, but the real reason for most of the increases lies not with falling stock prices, but with the forget-about-tomorrow thinking of elected officials in times of plenty.
When stock prices were heading ever upward, you couldn't find a politician arguing that municipalities and other pension providers should continue paying a fixed amount to pension funds. Rather, they reduced the payments so they could reduce or hold the line on taxes. In good years, municipalities paid next to nothing into the system. The market cycles up and down, and these same officials are now crying about making up for the losses.
If employers were required to make payments in good times and bad, the pension funds would maintain their value and the volatility of payments would cease to a great extent. Place the blame where it really belongs: on the poor planning by custodians of these funds. Everyone knows or should know that one must put aside money for a rainy day. Failure to plan for lean times in the stock market is planning to fail the taxpayers.
Lydia Rothkranz, Massapequa
