The Joy of Severance Pay

I've never received severance pay in over 45 years of my working career. No, I was a lucky one, very lucky. I was part of a defined-benefit retirement plan with the State of New Jersey. And so I started receiving a very good pension payment in 2009, almost exactly 5 years ago. I'm 63 now. I could die tomorrow or, theoretically, 40 years from now when I'm 103. This would be more than the average 83 years for most American men. I certainly expect to go sooner 'cause I've been a smoker for 50 years. Currently I'm in another period right now of trying to cut down, then cut out completely. 

The patch worked for me once, but not the second time. I can't stand chewing gum, never have. Cold turkey worked once, and I've gotten thru a couple days recently, but that's all I can take before my body's addiction and mental cravings start again. But I digress.

My philosophy is simply that every worker pays in, and receives more (from their employer), when they either quit or retire normally, especially after being vested for 10 years like New Jersey requires. This includes part-time workers over 10 hours per week. Again, they receive severance pay, or their retirement savings back in lump sum (or move it to a 401k etc), or receive monthly retirement payments. Every employee, whether in business, government or non-profits, including all religions.

Of course as bad, no, as horrible as it is now, with big chain stores and others hiring mostly part time employees for their operations, laws have to be put in place to prevent abuse or limiting hours to 10 per week. They have to. Unfortunately, short term quarterly profits are driving decisions in all businesses today, and the easy ability to only hire part timers except for management has to stop. Are their no controls on these unfair labor practices?

This also means that all employees everywhere have a Bill of Rights, the first right being "No firing without just cause," and the burden is on the employer to prove it. I was lucky in another way as well. For many years I had Civil Service protection, which decreased when I became a manager for the last 17 years of my career. Then, like tens-of-millions of Americans, I became a "Fire at Will" employee, subject to untold, unjustified, and sometimes unlawful excuses when it happened. Of course, being a manager also meant foregoing any raise, whether merit-earned or not, for at least 8 of those years. While all others received their annual merit increases. 

Look, when times are tough, for me, my family, my employer or others, I will do my part, take a hit, and cut back. Like in '92 when 1,500 employees were laid off (euphemism for "fired"), and I "lost" $20,000 in annual salary. Or the recent years since 2008 when the U.S. economy hit deep recession and everyone suffered. Of course, being laid off in hard times is exactly the reason why severance pay is so critical. Perhaps the amount is based on years or service or hours worked, but it must be something. 

We're very lucky in America. When laid off or fired we can apply for and receive  WEEKLY unemployment payments, for some period of time. It may be based on the insurance you carried, as in the State, and usually based on some factor of your last salary received.You have to apply or reapply every week, or two weeks. But it can be done online. Gone are the unemployment offices with long, long, frustrated lines of people, as we used to have on Hanover St in Trenton. As my son has written in his book The Secret Peace, major trends are making life easier and fairer, not harder and unfair. But, OMG, their are tons of regulations and requirements to wade thru. But at least benefits are out there. And there are plenty of non-profit and governmental organizations to help you find what's available based on your eligibility.

The bottom line is, Americans save less than 5% on average (Source: NerdWallet Finance). Social security may be minimal, and it's based on what you paid into during your working career. So severance to keep you on your feet between jobs is critical. And, a guaranteed retirement package of some kind, is essential to living adequately after age 60.

That bring's me full circle. In the 2015 NJ State Budget, Gov. Chistie has pledged $2.25 billion to fund the state's pensions systems -- state, teachers and locals, "the highest ever." More funding than the previous FIVE governors paid into the system to pay future liabilites (i.e. pension payments to loyal employees). $46 billion+ of unfunded liabilities! With 4 year terms, that means more than in the last 20 years! And who is criminally responsible for not paying into the pension systems? These past (and present) Governors. Criminally because they had a legal duty to do so, but used budget gimics and non-payments to balance their annual budgets.

And who will bring them to account for the obligations we find ourselves with today?

Food for thought.

Rodney Richards
 please subscribe or email me at 1950ablia@gmail.com

Oh and please check my new book Episodes available from Amazon at     http://www.amazon.com/episodes-rodney-richards/dp/0615914705     if you haven't done so already.
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