The Pension Debate, Condensed into 140 Characters

A routine post on Twitter sparks a flurry of comments over the sustainability of pensions for public sector employees.


I’ve just had a record-breaking day on Twitter, thanks to the mounting controversy around whether and how former, aging members of the U.S. workforce should maintain a dignified existence when their services are no longer required — or physically possible. Whereas not on the same scale as, say, the Grammys or Jon Stewart’s retirement from The Daily Show, the magnitude of the pension debate yielded more than 50 responses on the social media platform.

It began innocently enough on Tuesday morning, after I had tweeted about the latest report, “Case Studies of State Pension Plans That Switched to Defined Contribution Plans,” from Washington-based pensions research nonprofit National Institute on Retirement Security. The study looked at the results in three state retirement systems, in Alaska, Michigan and West Virginia, that just before or early in the 2000s substituted a defined contribution plan for their traditional defined benefit pension to new employees. Each state changed the pension plan in a different way, but the study found the results to be the same: increased cost.

To fit into Twitter’s 140-character space constraint — a bracing exercise for a journalist known to write 6,000-word tomes — I boiled down the essence of the article, added a link and identified the sponsor of the study, along with the hashtags #pension and #retirement.

And voilà.


Then the debate broke out between folks who believe public workers should no longer receive the traditional form of deferred compensation and those who are in favor of pensions.

John Ralfe, the former head of corporate finance of Boots Co., now Boots UK, the U.K.-based drugstore chain and now head of his own London-based pension consultancy, was the first responder. Ralfe gained fame in the pension world when, in a controversial move to fully match the fund’s assets to its future liabilities, he put the entire £2.3 billion ($3.5 billion) pension scheme into triple-A, long-dated gilts in October 2001. A few years later, Boots began to move some of its assets back into equities and real estate.

Ralfe, who believes that pension fund sponsors are too optimistic in projecting future pension portfolio returns at around 7 or 8 percent, answered, bringing in Bill Tufts, a fellow pension critic and co-author of Pension Ponzi: How Public Sector Unions Are Bankrupting Canada’s Health Care, Education and Your Retirement.




Ralfe then steps aside and allows the more vehement Tufts to take over. The Ontario–based pension policy adviser seeks donations to his nonprofit, Fair Pensions for All.

Tufts hits back.




Stephen @PensionCanada rebuts.


I try to get at the heart of the matter.


Another Canadian pension critic chimes in.


Mike Morrison, former head of pensions development at U.K.-based AXA Winterthur Wealth Management and now head of platform marketing at AJ Bell, a Manchester-based provider of online investment platforms and stockbroker services, speaks up.


I take that as my cue to engage people in thinking about new pension models that are designed to work in the 21st century, rather than squabble about defined benefit versus defined contribution plans.


Tufts’s take, still worrying about plan costs:


I come back with a request.


Finally, the tide turns. An olive branch is offered.


Touched by the sentiment but alarmed that my adversary thinks my long-form feature stories are mere blogs, I respond.


Why were the most engaged pension Tweeps from countries with more evolved retirement systems than those in the U.S.? I will leave that to tweet another day.

Follow Frances Denmark on Twitter at @francesdenmark.

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