Public Employee Pensions Should Be Fair All Around

Andrew G. Biggs describes how the state of Montana is seeking to minimize the amount of its unfunded pension liability to be disclosed to the public ("Public Pensions Cook the Books," op-ed, July 6). He explains why state and local governments might wish to understate this figure, but says little as to why the various public employee unions -- ostensibly those which should be protecting the future pensions of their members -- aren't themselves insisting on a more honest and realistic calculation of this liability. I suggest there is a very practical reason for union acquiescence to an underestimation of the pension liabilities owed to their members: They have more to gain by maintaining the present system, as opposed to risking any changes to future benefits which might result from an honest accounting of the liabilities.

Generous retirement benefits for teachers and other public sector employees, we are told, compensate them for the relatively lower wages they receive on the job. Long ago, this was likely the case. Yet over time, as teaching and other public sector jobs have increasingly become unionized, that wage gap (to the extent it still exists at all) has been reduced. But the generous benefit structure, from pensions to fully subsidized health care to vacation allowances, has been safeguarded by the unions and the administrators (many of whom are themselves union members). In other words, the pension and benefit systems are at the core of how teaching and other public employee unions maintain themselves.

If the pension and benefit systems look more like the packages found in the private sector, it becomes harder to justify having a union. It seems that maintaining the system is the chief goal of public unions; paying for it is someone else's problem.

W. R. Nelson
Glenview, Ill.