Tennessee desperately needs to reform its pension program for government employees. This is your opportunity to stand up for Tennessee taxpayers and demand politicians of both parties finally represent the people and not government unions.

Tennessee’s long-term unfunded pension liability is over $30 million!

Volunteers cannot afford such a catastrophic debt, we need pension reform, and we need it now!

AFP-Tennessee is advocating for reform that changes government employee retirement benefits from defined benefit to defined contribution. This important reform will ensure government employees receive fair compensation, while simultaneously putting Tennessee’s finances on surer footing.

In 2011 only 21% of private sector employers provide a ‘defined benefit’ plan to their retirees, while 84% of government employees receive the generous benefit. A defined benefit plan is a guaranteed value of salary, health care and other benefits that will be distributed to retirees; whereas the common system in the private sector – defined contribution – merely stipulates the match employers will contribute to the employee’s retirement plan. Often this is a 401K, or similar program. This discrepancy between public and private goes a long way in explaining why on average government workers receive 69% greater benefits than retirees in the private sector.

Defined benefits plans often have a COLA (Cost of Living Adjustment) provision that automatically increase the value of the benefits for the government employee. With health care, transportation, and improving life expectancy, the cost of providing guaranteed benefits to Tennessee’s state employees is drastically rising with no end in sight.

This basic economic problem; continual rapid growth in costs with limited revenue – especially considering the current economy – coupled with a volatile stock market, in which Tennessee does invest money hoping for a return, and it does not take an economist to realize that defined benefit programs do not work.