“Public Sector Pensions and Benefits”

Review the author’s statement in Chapter 13: “New-generation human resource managers must add to their work portfolios how to help employees make appropriate decisions about participation, contribution, and even investment in their benefit packages so that they better enable themselves when they retire to maintain the standard of living they had when they were working.” Analyze your own retirement pension and benefits package, (or absence of a company-provided package) and offer three pieces of advice to Generation X-ers and Generation and Y-ers regarding their retirement.

I’m already in retirement and regret not being able to offer advice based on my experience. But based on my research, it has been theorized that many generation X-ers and Y-ers aren’t too concerned about retirement because that era seems so far away. So, my advice to these community of young people would be:

• Ensure you understand how your company-benefits package chooses to investment your contributions. Your initial pension fund may have several options to choose from.

• When you see your retirement account building, try not to withdraw portions, even for emergencies unless there are no other options. If you can hold off from making withdrawals, at the end, you will be pleasantly surprised to be able to maintain a comfortable life-style in your retirement years.

• Monitor your pension fund frequently to see where you need to make adjustments in your investments as your life advances from one phase to another and always transfer your retirement savings to another trust fund when changing jobs. For example, when you leave a company, you will have the option to withdraw (with taxes to be paid and maybe some other fee) or simply transfer within the grace period (determined by the trust fund) without any fees or taxes.

Discuss at least two pros and two cons of allowing public employees to bargain collectively with their agencies about their retirement benefits (OPEB). (Refer to Table 13.4 Benefits Reform Dimensions in Chapter 13.)

The term OPEB indicates other postemployment benefits. If my understanding is correct, collective bargaining would offer at least the two pros and cons as follows:

Pros

• A compromise between employer and employees on a particular benefit such as adding a dental or vision package, would give the company some predictability on sustaining productivity from knowledge workers while the employees would have a greater quality of life when they retire. Unresolved OPEB issues may cause employees to go elsewhere.

• A collective bargaining agreement (CBA) can be renegotiated when it ends. While the CBA is in force, employees and employers both can evaluate the benefits to see if each side is continuing to benefit (Lombardo, 2015)

Cons

• One side can take advantage of weak representation (Lombardo, 2015). Lombardo says
  if workers or management don’t have a skilled negotiation team in place, then one party can take advantage of the other. This means some needed retirement benefits could be undermined for the employee or perhaps excessive in terms of cost. However, this could be mitigated through legal representation.

• A divide between workers and management could be created. Collective bargaining naturally separates management from workers. Each group often feels like the other is out to get them, so the goal is to protect one’s own best interests instead of working cohesively together.

Reference:

Lombardo, C. (2015, October 24). Pros and Cons of Collective Bargaining. Retrieved from Vision Launch : http://visionlaunch.com/pros-and-cons-of-collective-bargaining/#