Today (14 Feb 2012) the City of Phoenix Pension Task Force made its report to the City Council. The fact that task force chairman Rick DeGraw never even mentioned a transition to 401k plans is only the most glaring example that they must live in some fantasy land. I was the manager of the pension department at First Interstate Bank (and the IRA department) and I personally served for over 20 years as trustee of a $13 million 100+ employee profit sharing plan so I have closely followed the evolution of qualified plans.

The simple fact is that private companies have conclusively shown that they cannot continue to bear the liabilities of defined benefit pension plans and have voted with their feet by moving decisively to 401k plans. Taxpayers also cannot afford these huge liabilities and the fact that DeGraw did not even mention a move to 401k plans means that the City of Phoenix is stuck in fantasy land.

I suggest that we wake up. One only needs to look at Greece or Italy or Portugal or various cities in California to realize that the days of cushy public sector pensions must come to an end.