Divided We Fall

The political expedient of offering a free lunch leads government authorities to make commitments they cannot support in the long term without assessments and tax increases–both political suicide. The get hit in their campaign funds and hit at the polls. The American wealthiest and their corporate empires assume a 19th century uber-privilege, owing nothing to the societies that fed their greed and freely buying the politicians to insure that. American voters meanwhile have been convinced that they deserve to have the amenities but not pay for them.

Then, when the bills come in, the authorities, beholden to their wealthy benefactors, look for excuses and scapegoats rather than biting the bullet, correcting tax law, and convincing tax-payers to pay up or give up the things they’ve come to expect. So the result is that they go after two of their own big expenses–the public workers, who make our society civilized, and the neediest, who don’t pay much tax and often don’t vote. Breaking the life-long promise of a pension to public employees, cutting funding to schools, and reducing the public work force, government chews off its own leg to free itself from the trap of its own design. Cutting off the needy is simply barbaric.

America has been effectively marketed a dream that everyone deserves a life that is fun and feels good. Watch almost any TV ad. Americans are discouraged from thinking about how that could be true when we know that life includes effort and pain. Only when enough of us look around and think will we begin to reverse the seemingly inexorable trend toward a country of 350,000,000 individuals, each at the center of her or his own universe, and start to reestablish America as a united society, who share common needs despite individual differences. If “divided we fall” has not been apparent before, certainly watching the human pieces of our civil society fall away over the years should alert us to the future we will leave our children and grandchildren.

Every thoughtful person must stand up, speak out, help out and vote.

House passes 2016 Omnibus Pension Bill

The Minnesota House of Representatives on Sunday passed the 2016 Omnibus Pension Bill (SF588) on a vote of 129-3. The bill now goes to Gov. Mark Dayton.

Legislative Commission on Pensions and Retirement (LCPR) chair Tim O’Driscoll (R-Sartell) summarized the provisions of the bill, whose major changes call for the investment return assumption for Teachers Retirement Association (TRA) to be lowered to 8 percent, and for the cost-of-living adjustment for retirees of TRA to be lowered to 1 percent for one year and for the Minnesota State Retirement System (MSRS) to be lowered to 1.75 percent for one year beginning Jan. 1, 2017.

The bill also contains a half-percent employer contribution rate increase for the St. Paul Teachers Retirement Fund Association (SPTRFA) as well as changes to provisions dealing with disability eligibility, Minnesota State Colleges and University system and language to bring the state retirement systems into compliance with federal tax law.

O’Driscoll said that the pension commission earlier this year received actuarial experience studies detailing demographic and economic recommendations that require “heavy financial lifting” – referring to sustainability packages supported by MSRS and TRA retirees, active employees, boards and employer units. These original sustainability packages reflected shared sacrifice and offset deficiencies created by increased life expectancies and decreased investment expectations.

“We have set that aside for this year since it’s not a budget year,” opting instead for a highly limited sustainability measure that reduces the retiree COLA for MSRS and TRA for one year beginning Jan 1, 2017, O’Driscoll said. This limited sustainability measure saves the systems $81.5 million, he added.

Rep. Mike Nelson, D-Brooklyn Park, introduced an amendment to delete the provision of the bill calling for a COLA reduction for TRA and MSRS retirees. Nelson said that when action is necessary to garner savings for the state’s pension plans, shared sacrifice is normally involved.

“What this plan does is take it out of the hide of retirees only. Their COLAs are being cut, their future raises are being cut, and the employers aren’t putting any more money in and the employees are not putting any money in,” Nelson said. “It’s not fair.”

Nelson said legislature is missing an opportunity, given the budget surplus, to “put more money into the pension plans so our retirees can be safe and secure in their retirement plan.” This fix only nibbles around the edges of the problem, he said. “We should be putting money into this plan now to help fix this problem.”

O’Driscoll encouraged a no vote on Nelson’s amendment, adding that the COLA reduction would represent the first step toward a pension plan solution. The Nelson amendment failed on a narrow 62-68 vote. Nelson later expressed disappointment in the failure of his amendment, but said that since this appears to be the best pension bill that could be achieved this year, he encouraged a yes vote.

A partisan skirmish erupted after Rep. Joe Atkins, D-Inver Grove Heights, introduced an amendment to raise the base benefit amount for 83 police and fire survivor recipients. Atkins argued that these people do not receive Social Security and the proposal is an effort to “do right by these members.” The cost would be $2.4 million, which Atkins said can be harmlessly absorbed by the Public Employee Retirement Association’s (PERA) Police & Fire Plan.

O’Driscoll said that he had received a letter from PERA laying out concerns about this idea, and that PERA’s board does not believe the proposal is financially sound. Prompted by Rep. Tony Albright, the House Speaker ruled the amendment not germane, and House minority Democrats expressed outrage at the notion of not allowing a pension-related amendment to an omnibus pension bill. The procedural vote stood, and the Atkins amendment was ruled non-germane.

Rep. Phyllis Kahn, D-Minneapolis, introduced an amendment directing the Minnesota State Board of Investment to develop climate change risk management strategies in its investment approach. O’Driscoll read a letter from SBI Executive Director Mansco Perry urging the legislature not to tie the hands of the SBI in making investment decisions.* The Kahn amendment failed.

Courtesy of TRA Communications

 

* Note from C of 13 editor: See following posting of Divestment-Investment, “Ethics and Energy: Thoughts on Divestment”

Ethics and Energy: Thoughts on Divestment

As global temperatures rise with climate change, so too does the heat of debate over the issue of investment in the fossil fuel industry.  With this debate has come a call for the Minnesota State Board of Investment (SBI) to divest its fossil fuel holdings.  Currently, a Divest-Invest Minnesota Committee is actively lobbying for the SBI to divest its holdings of these stocks.

A twofold controversy arises over the divestment issue:

1)  The right of one group of beneficiaries of the state’s assets to impose its will on all beneficiaries

2) The consequences of the proposed divestment 

Normally, the answer to the first issue would be simple—a minority interest group should not control the majority. However, if, as some argue, we are truly on the brink of destroying the life-sustaining environment of our planet, a more compelling argument might be made for the minority point of view.

A response to the second issue of the consequences of divestment is also complex. Will selling shares from one investor to another send a message, ease a conscience, or alter the behavior of the targeted corporation?  If other large shareholders divest, will that collective action affect corporate behavior? It is hard to say. Another question lingers—Does ownership of an asset indicate endorsement of that asset’s goals and activities? 

Those who argue against divestment point out that in doing so a shareholder forfeits the opportunity to influence the governance and operation of the company through proxy voting and the introduction of resolutions.  A collaboration of large shareholders, exercising their shareholder power, might affect corporate behavior, protecting fragile areas from exploitation or forcing a company to disclose what it knows of the harm done by its operation or by convincing the company to transition from fossil fuel investment to renewable energy alternatives.  By forcing a long-term view of operations, the worst of short-term devastation may be avoided

The fossil fuel industry has demonstrated itself to be brazenly unscrupulous, wreaking ecological devastation and lying to the public about its effects on climate change.  The question remains: What is the most effective investor response to the threat the industry poses for the planet and the investor’s quest for profit?  Will divestment or activist shareholders make a greater difference?

The controversy over the ethics of investment in fossil fuels will undoubtedly continue.  However, there can be no reasonable doubt about the science supporting the urgent need to find alternatives, to break our addiction to carbon based energy and to find future profits in the development of renewable energy.

 

Committee of Thirteen member, Larry Risser


 for more thoughts, see:

Tim Smith. “Impact through Shareholder Engagement,” Journal of Environmental Investing, 7, no. 1 (2016)

visit:  http://www.thejei.com/impact-through-shareholder-engagement/

Senate passes pension bill

The Senate version of the 2016 Omnibus Pension Bill (SF 588) on Thursday passed out of the chamber on a vote of 61-1. Sen. Eric Pratt voted no.

Senate bill author and pension commission vice chair Sen. Sandy Pappas, D-St. Paul, introduced the bill by saying that the state’s pension plans recently conducted studies and found that public employees are living longer, which means that retirees will be collecting pension checks for a longer period of time as well. Pappas said it is a normal part of pension oversight to have to come in and adjust items such as employer and employee contribution rates and retiree cost-of-living adjustments.

Pappas said that the Teachers Retirement Association and the St. Paul Teachers Retirement Fund Association (SPTRFA) brought sustainability plans to the Legislative Commission on Pensions and Retirement (LCPR) that were expensive because they required more from school districts and state agencies. As it became clear that money would not be available, Pappas said, the current bill was scaled back and has no dollars attached to it.

Under the current bill, St. Paul Teachers will increase contributions by 0.5 percent of salary beginning in 2018. A mechanism that would trigger higher COLAs for all public pension fund participants is being eliminated “so nothing is on automatic pilot,” Pappas said. TRA’s amortization period will be extended to June 2046. To avoid statutory COLA increases on Jan. 1, 2017, the current bill calls for the COLA for MSRS members to drop to 1.75 percent for one year, and TRA members’ COLA drops to 1 percent for one year.

These measures save the plans some money now, but the goal is to return next year to discuss further adjustments. “The governor believes this [a comprehensive sustainability package] needs to happen, if not this year then next year,” Pappas said, adding that the stopgap measure provides time to consider what kind of adjustments in school aid and agency budgets will be required to offset increased employer contributions.

Pappas summarized the technical administrative provisions in the bill, which includes lowering the investment return assumption for TRA to 8 percent. The Public Employees Retirement Association and MSRS lowered their investment assumptions last year. Another provision of the bill allows public plans to accept gifts or bequests. Pappas said the bill moving to the House on Friday is the same as hers.

Sen. Pratt, R-Prior Lake, asked Pappas about the origins of the 8 percent investment assumption. Pappas said that the pension funds, their actuaries and boards – as well as the pension commission – consults with the State Board of Investment. Minnesota’s investments have done very well, are well managed, and are designed with a long-term strategy in mind. Pappas said the pension commission felt that lowering the rate was a good cautionary move, though lowering that rate does have the effect of making the funds look like they’re not as well funded.

Pratt said that the assumption is still too high, and that even investment guru Warren Buffett says that over the long term, the market assumption for returns shouldn’t exceed 7 percent. Pratt added that while there have been good years where the return is 15 percent or more, those gains were wiped out during economic downturns. The state should be looking at fairly conservative investments, he said, noting that the prime rate is only 3.25 percent and that no depository is paying more than 1 percent on deposits.

“These plans aren’t sustainable under their current assumptions, and this is one of those assumptions that are still too high,” Pratt said. He added that he is glad the retiree COLA is being dropped to 1 percent for TRA.

Pappas said that with the Consumer Price Index, a measure of inflation, under 2 percent, LCPR members have been torn about cost-of-living increases for retirees. “In our pension principles, we really believe we need to retain the buying power of the retirees’ paycheck in order to not have it erode” but we realize that the COLA is expensive, she said. She invited Pratt to bring his expertise to the pension commission, and encouraged him to consult with SBI Executive Director Mansco Perry about the investment return issue.

Sen. Mary Kiffmeyer, R-Big Lake, said that large retiree COLAs during boom times in the stock market and the economy “robbed the core” of the pension funds of money that needed to be retained for a rainy day and that legislature was complicit in those decisions. She said there should be a standard that all retirees can count on so that one group of retirees does not get a severe reduction in their COLAs while previous retirees almost double their pensions in a few years. Kiffmeyer said that investment return assumptions have been too high, but the costs to the plans of lowering it shouldn’t be “put on the backs of retirees.” 

Sen. Terri Bonoff, D-Minnetonka, also expressed concern about the 8 percent investment return assumption and said she shares Kiffmeyer’s concerns about keeping promises to retirees. Bonoff said she has been approached by constituents who are investment advisers and they also are concerned that the pensions are underfunded. She asked Pappas for her view about the long-term viability of the state’s pensions.

Pappas said that SBI’s Perry has been quoted as saying that 8 percent is “not unreasonable.” Because of the amount of money the state invests ($65 billion in pension fund assets) and the clout that comes with it, Minnesota is able to get a good rate of return. She added that MSRS is over 85 percent funded, TRA is about 75 percent funded, and St. Paul Teachers is about 74 percent funded. Pappas added that if lawmakers are concerned about the state’s bond rating, additional parts of the original sustainability package can still be acted upon this weekend.

Sen. Dave Thompson, R-Lakeville said that the pension systems are unmanageable and that Pratt is correct that it’s dangerous to assume an 8 percent rate of return. “If you drop the rate, projections look bad,” he said. “And not only do we have economic insecurity, now we’ve got an aging population that’s going to put stress on the system.”

Thompson said the legislature should discontinue the defined-benefit program and go to a defined contribution plan such as the 401(k)-type plans found in the private sector. The people who run these pension plans and the investment portfolio do an extremely good job and in good faith, he said, but “the system is just unworkable.”

Pappas responded to Bonoff’s comments by saying that in Minnesota, the percentage of state and local spending on pensions is much less than the national average (about 2 percent in Minnesota vs. 4 percent nationally). Pappas also pointed out to Thompson that transitioning from a defined-benefit pension to a defined-contribution model would cost billions of dollars because benefits would have to continue to be paid out even though the plans lose new contribution revenue.

Sen. Julie Rosen, R-Vernon Center, said the pension commission is nonpartisan and that members take their duties very seriously. Rosen said the current pension bill is a very good compromise made necessary  after the commission “received a sucker punch” in the form of hard-to-stomach mortality studies. “When you do reform in pensions it’s very slow, like trying to turn the Titanic – and you have to do it deliberately and with seriousness and make sure those funds stay viable.” She urged her colleagues to vote for the bill because it’s the right thing to do.

courtesy TRA Communications

The State of the Pensions as the Session Comes to an End

On Tuesday, the Omnibus Retirement Bill was approved by three committees: the Legislative Commission on Pensions and Retirement (LCPR), Senate State and Local Government Committee and House State Government Finance Committee.  The bill will soon be considered on the House and Senate floors.  The bill contains administrative provisions and “stopgap” sustainability measures that reduce the MSRS COLA to 1.75 percent for one year and the TRA COLA to 1 percent for one year.  The proposal also eliminates future COLA triggers. Highlights from each hearing are below.

 

LCPR Hearing

LCPR approved the omnibus bill containing administrative provisions and scaled down version of sustainability.  LCPR Chair Tim O’Driscoll, R-Sartell, stated that because there is no money set aside for pensions this year, full sustainability could not be pursued but he wanted to get at least a start on the package.  He explained that he had heard concerns raised about how state agencies and school districts would be negatively impacted by proposed contribution increases.  Sen. Sandy Pappas, D-St. Paul, described how she and Rep. O’Driscoll met with the governor and MMB Commissioner Myron Frans and that they believe sustainability is important to the state’s bond rating and keeping the funds on track financially. But it appears to be late this year and the intent is to build the financial needs into state agency budgets and school aid revenue next year.

Mark Haveman, Executive director of the Minnesota Center for Fiscal Excellence, testified that other states have gotten into trouble because of a failure to make prompt corrections with their pension plans. Haveman stressed that root of Minnesota’s problem is an overly optimistic investment assumption.  Rather than being on a path to full funding, he said we are “like a hamster on a wheel that is turning faster and faster.”

Julie Bleyhl, AFSCME Legislative Director, testified in opposition to the proposed stopgap sustainability bill calling it is a “piecemeal” approach with no balance or shared sacrifice.  She said the AFSCME board supports the original proposal, but they find the interim measure unacceptable.

Rodney Rowe, Education Minnesota’s Secretary-Treasurer, testified and re-affirmed their support for the original proposal.  He indicated the stopgap measure solves only 4 percent of the funding problem and puts the entire burden on retirees.

Joan Beaver, Education Minnesota Retired, testified in support of the original proposal and reminded LCPR that pensions are an important teacher retention and recruitment tool.

Rep. Mary Murphy, D-Hermantown, stated she is very concerned that this is has become a repeated cycle in which we come to the end of the session and find out there is no money.  She urged LCPR members to be advocates in the budget setting process to ensure sufficient funds become available for pensions earlier in the process.  She said state agencies need to have line items in their budgets for pensions.  Murphy warned that next year, LCPR members need to be appointed in January in order for work to start promptly on sustainability.

 

Senate State and Local Government Committee Hearing

Sen. Pappas testified, saying that the original sustainability package brought forward by Teachers Retirement Association (TRA) and the Minnesota State Retirement System (MSRS) is the correct solution, but she acknowledged that funding is not available for that full package this year. Pappas said she will continue to seek money for the original package in the closing days of the session. Pappas noted that Gov. Dayton supports the original sustainability package.  Pappas said if she takes over the gavel of the pension commission next year, she is committed to completing the remainder of the sustainability package.

Sen. Jim Abeler, R-Anoka, mentioned the issues surrounding the Teamsters pension plan and said he knows Minnesota wants to “keep promises made.” Abeler asked about the general health of Minnesota’s pension plans, and Pappas provided numbers on the negative effects of experience study changes on all of the systems’ funded ratios. She said that while the pension systems were adequately funded in past years, changes in the investment markets and demographics mean that significant changes are needed to put the funds on path to full funding. She acknowledged that current COLAs are low (1-2 percent range), but that’s all that is currently affordable. Pappas also said she was nervous about not passing a more complete package and is concerned it will negatively affect the state’s bond rating.

Laurie Hacking of TRA and Dave Bergstrom of MSRS testified on the minimal financial impact of the stopgap measure and reiterated that a broader and more balanced package is needed.

In public testimony, Lonnie Duberstein, president-elect of the Retired Educators Association of Minnesota (REAM), said his membership is not happy with the stopgap proposal but understands there’s a need to fix the problem. He said that teacher recruitment has become very difficult, and that many leave the profession early in their careers because of stress. Duberstein said that one thing that kept him in the profession was that he knew he would have a pension when he retired. Pensions are very important to teacher recruitment, he said.

Joan Beaver of Education Minnesota Retired said her organization’s board discussed this “anemic” version of sustainability and supported the original proposal because of the shared sacrifice approach. EdMN Retired doesn’t like the COLA cuts, but there is a willingness to be part of the solution, she said. The group is disappointed that there are no contribution rate increases at a time of budget surplus and that the proposed stopgap solution only corrects 4 percent of the problem. EdMN Retired opposes the 1 percent COLA proposal unless it is part of the whole package that was originally proposed, she said.

Grace Keliher of the Minnesota School Boards Association (MSBA) said her group has been working with TRA from beginning on sustainability efforts, but MSBA can’t support the original package without state funding. She thanked Pappas for being a “warrior” on the issue.

Jodee Buhr of Education Minnesota said the union also has been working with the TRA board and had supported the package because of the shared-sacrifice approach. She emphasized that pensions are a recruitment tool, and the stopgap measure is not enough to ensure that the plan is sustainable for current and future teachers. Buhr said the legislature must continue to work on the remaining parts of sustainability package.

Louise Sundin of the Committee of 13 (Minneapolis), said the original package was delicately balanced and that her group is disappointed at this scaled-down version. She pointed out that employer contribution rates in Minnesota are much lower than they are in other states. The Committee of 13 board is reluctant to support the stopgap measure but appreciates Pappas’ tenacity, Sundin said.

 

House State Government Finance Committee Hearing

LCPR Chair O’Driscoll along with LCPR Executive Director Susan Lenczewski walked the committee through a section-by-section description of the bill. O’Driscoll explained that since this was a short session and an off-budget year, and therefore only limited sustainability measures were able to be included because of lack of funding.  He pledged to be back next year with a more comprehensive solution.

Rep. Lyn Carlson (DFL-Minneapolis) voiced concerns about the long-term fiscal impact if the legislature waits to solve the pension funds’ financial problems.  He warned that, based on his pension experience, deficiencies grow rapidly and that it is better to act sooner rather than later.  O’Driscoll responded by saying that at least the stopgap measure in the proposed bill saves $81 million for this year and that he would work for a more global solution next year.

Rep. Mike Nelson (DFL-Brooklyn Park) stated it is unfortunate that the bill’s remedies are focused exclusively on retirees when in past years, a more balanced shared sacrifice approach was taken. Nelson said he is disappointed that we have lost the opportunity to take care of this problem, especially in a year that there is a $900 million budget surplus.

Brian Rice, representing AFSCME, indicated that AFSCME does not support the bill because it includes only a COLA cut for MSRS and not the whole package that spread the responsibility among retirees, actives and the state.

 

Courtesy TRA Director, Lauri Hacking

And the Bright Side Is….??

The House Government Operations committee on Monday approved a limited sustainability measure for Teachers Retirement Association (TRA) and the Minnesota State Retirement System (MSRS). The measure:

·    Reduces the retiree COLA for MSRS Plans (other than State Patrol and Judges) and TRA for one year only, effective Jan. 1, 2017, to 1.75 percent for MSRS and 1 percent for TRA. The COLA then reverts to 2 percent.

·    Removes the COLA trigger for MSRS-General, MSRS-Correctional, TRA, and St. Paul Teachers Retirement Fund Association (SPTRFA) so there will be no automatic increase in the COLA for each of these plans if specific funding thresholds are reached; and

·    Provides for an increase in the employer contribution of 0.5 percent of salary, for both the basic and coordinated plans of St. Paul Teachers Retirement Fund Association, effective July 1, 2018 (funded by the St. Paul School District).

The limited measure passed on Monday will not close the $1.5 billion funding gap created by increased member longevity and other findings of recent pension system experience studies. For example, reducing the TRA retiree COLA alone addresses only about 4 percent of the funding gap; a gap of over $1.4 billion would remain.

The pension systems have been seeking a more comprehensive solution that reflects a more balanced approach – or shared sacrifice – among retirees, active employees, and employers.

Rep. Tim O’Driscoll, R-Sartell, who chairs the Legislative Commission on Pensions and Retirement (LCPR), said that much more needs to be done to stabilize the plans and that the COLA measure is only a start. O’Driscoll acknowledged that there is much “heartburn” over the partial solution, but said there is no funding forthcoming and that this action is one step in the right direction.

Rep. Mike Nelson, D-Brooklyn Park, said he was disappointed that not more is being done this year to support the pension funds, especially in a surplus year, and expressed support for pursuing a more complete solution next year. He said the state must meet its obligation to Minnesota’s public workforce to ensure that the plans are sustainable and that legislative solutions are fair and balanced.

Nelson and Rep. Joe Mullery, D-Minneapolis, said they were concerned that the burden falls to one group (retirees), and Mullery noted that there have been instances in the past where funding for pensions was allocated in non-budget or even-numbered years.

Courtesy of TRA Communications

Investing in Your Retirement Income

How is investing in your retirement income like keeping yourself in food? Well, how do you keep yourself in food now?

Feed-Me #3: I eat at my parents’ until they invite (force) me out to work and live on my own. Okay. Partying, social media, Starbucks platinum level may have to back off in place of serious work, rent and utilities, and eating out—but giving up international cuisine is asking too much. After all, you only live once, right? And this is how it will go until I drop or marry into money, the latter of which is not likely to happen when I pass the retirement age of 70+. By then inflation is likely to have out-paced wages by 100%. Hello, cat food.

I had no pension plan, except Social Security, and years of small government conservative shrank that and Medicare to something less than the poverty level and free clinic visits. No one explained to me that not everyone wins the lottery or winds up in the top 2% of wealth.

Feed-Me #2: I make a plan before moving out to own a house by 35, so save for a down payment while working hard and long—a day job plus a part time. I buy smart and healthy at the co-op and learn the best buys in wine and craft beers. I take a cooking class or two and master some pretty good dishes that impress my friends and partner. Our children don’t appreciate the food, but demand much in clothes, sports activities and tech-toys. Our kids go off to very good schools, which we hope will earn them high paying jobs.

By the time we settle in to paying off the house and college loans, we realize that there has never been a time to contribute the advised 20% of income to an IRA. We will be working past retirement age if we can, but those last 5 years of life, which cost half or more of our total life medical costs may have to be covered by the kids. I may be watching a modest life drain away into a long, sad decline. It all balances out.

Feed-Me #1: I live at home, paying costs to my parents until I have a steady career job. I plan on buying a home as soon as I can arrange it. I live as cheaply as I can manage, valuing people over things, parks over concert halls, Mr. Coffee over Starbucks. I use public transportation, which alone saves enough for a down payment on a house in about five or six years. I buy smart and healthy at the Cub. I have learned what foods have real value and are affordable. As soon as I can, I get a garden plot to supplement the expensive stuff I can grow. Once I get a house, I plant an apple tree in the yard and a big garden in the back. These investments, along with running and biking, help keep me fit as well, and will reduce my medical costs even into very old age. Live starts early and ends late after all.

I was fortunate enough to have a public pension plan which with Social Security took about 15% of my salary, and that was matched by my employer. I have paid off my house, and the kids’ public college loans are handled. Since I also saved in 430(b) and 457 plans almost from day one, I will have enough income for the next 20-25 years to equal about 80% of my final working salary. That means travel, visiting the kids, and even reinvesting against expensive final years.

Just as I planted seeds in my garden, I planted financial seeds in my retirement plans, and because I started early and waited, as I did with the apple tree, I can actually wind up with more than I absolutely need. Just as I understand the growing season, I see the value of treating life as a whole process. I could have just lived on the harvest collected by others; then I would have been feeding the others as well, and that would be expensive and would have no end. I could have joined the harvesting, cutting the wheat I could later eat, and that would have reduced the cost, but because of waiting until late in the process, it would have offered too little a return, and even that return could be threatened by a bad crop. Worse, next season, when I wasn’t working, I would earn no return at all.

Even starting early, planning and exercising some prudence, while it could earn proportional wealth compared to those early years, — even that case offers no guarantee. Climate change, mining operations, social disorder, any number of things can spoil the crops or even poison the land. Social Security and Medicare can still be gutted, pension plans can be subverted, or the world economy can collapse.

There are no guarantees; there are risks. The trick is to minimize the risks, and that is best done by pooling our efforts. Going it on your own, no matter how good you are, leaves you the most vulnerable. There is safety in numbers. It doesn’t matter how confident you are in your abilities, the thing that will get you is beyond your control or anyone else’s. Life is a challenge; rise to it; don’t try to play it. Your public employee pension plan is your best hedge against tragedy. It’s your right. Support it.