As anticipated, the governor called a special session that convened at noon on Thursday and is expected to run through July 1.

As anticipated, the governor called a special session that convened at noon on Thursday and is expected to run through July 1. This special session will tie together an unlikely pair of issues – special tax breaks for Ford and state employee pension reform.

While I do not support the Ford plan (which could give automakers and related companies up to $15 million per year in taxes owed to the state), I do support pension reform for the state government employee retirement system, the part of the equation that will offset the costs of the tax incentive bill the governor has asked the Legislature to pass.

In today’s workplace, it is rare for employees in the private sector to have defined benefit pension plans. These plans are very expensive to operate because they shield employees from any economic downturn – shifting the risk to the employer.

However, under the current state system, taxpayers are ultimately on the hook to pay for the cost of government retirement benefits – regardless of conditions in the economy at large. Quite simply, our state cannot afford the high costs of the current state employee pension system.

During the special session, lawmakers will consider a bill that would create a different retirement plan (though still defined) for future state employees.

Employees under this plan would be required to contribute 4 percent of their pay to the retirement system and work for the state for at least 10 years to be vested. In fairness, we cannot go back on promises made to current state employees, so the proposed changes would not affect them, but it is fair to change the benefit levels for future hires.

Over a 10-year period these retirement reforms are anticipated to save the state approximately $311 million. At a time when state government is struggling to balance the budget, these additional cost savings would be very helpful.

We must come to terms with the reality that the level at which state government currently operates is unsustainable in a tight economy. Making changes to the state pension plan is one of a series of reforms needed to ensure the Show-Me State’s future prosperity.


If you have any comments or questions about this week’s column or any other matter involving state government, please do not hesitate to contact me. You can reach my office by e-mail at matt_bartle@senate.mo.gov or by phone at 888-711-9278.