On pensions, labor is driven by political considerations rather than actuarial calculations

Contra Costa Times reports:

Although public employee pension plans across California are badly underfunded, union leaders have expressed little concern about the security of workers' retirement pay.

If anything, many dismiss worries about pension fund shortfalls and advocate accounting practices that could make the problems worse. In other words, they seemingly act contrary to the long-term interests of their members.

It's not that union leaders are acting irrationally. Quite the contrary. They are behaving quite rationally under the incentive structure we've created. It's the structure that must be changed.

Sarah Anzia, assistant professor at UC Berkeley's Goldman School of Public Policy, studies the politics of pensions and has developed theories about labor leaders' behavior.

One might assume that government employees and their unions would want to ensure that pension contributions are adequate, Anzia noted during a panel discussion last week at the school. "These are their pensions. They should want to make sure that funds are sufficient to pay benefits."

Just a reminder.