Welcome to the latest edition of This Week in Pensions! Each week we gather the best stories about pensions and retirement security from the previous week. This is the news you need to know in the fight for a secure retirement.
Here are this week’s top stories:
- Defined-Contribution Plans are Inadequate Substitutes for Pensions by Ben Valdepena: Californians for Retirement Security submitted testimony to the DNC’s Platform Committee encouraging them to make the fight for a secure retirement part of the Democratic Party’s platform. NPPC also submitted testimony, which you can read here.
- Pension Holders Need a New Retirement Plan, Not Stock Tips by Steven Rattner: Wall Street executive Steven Rattner details the failings of 401(k)s to provide a secure retirement for working families. He writes: “Once upon a time, many Americans enjoyed an employer-based, defined-benefit system in which they could depend on a no-hassle pension of a specified amount. But about two decades ago, faced with mounting costs and increased regulatory burdens, employers began replacing traditional plans with “defined contribution” plans like 401(k)’s. That created two immense problems.”
- Counterpoint: On public pensions, the sky isn’t falling by Eliot Seide: as Minnesotans continue to live longer, Minnesota’s public pensions are facing increased pressure. However, the answer is not harsh benefit cuts to current retirees, as the legislature proposed. “The sky is not falling. There’s no reason for taxpayers or public workers to panic.”
- Public pension plan funding rises slightly in 2015 — report by Hazel Bradford: a new report from the Center for Retirement Research finds that public pensions continue to improve their funding levels each year as they continue to recover from the recession. Just as encouraging, state governments have increased their commitment to funding pensions, contributing 91 percent of the annual required amount (on average) in 2015.
- Mayor, pension boards on same page at hearing by Mike Morris: earlier this month, a group of Texas state legislators held a hearing in Houston on the subject of that city’s public pensions. Houston Mayor Sylvester Turner testified at the hearing and declared his support for maintaining defined benefit pensions.
- Optimism is alive in the form of Louisiana’s pension reform by Maureen Westgard and Cindy Rougeou: the directors of the two largest public pensions in Louisiana write that reforms made in recent years have proven successful and that state lawmakers should allow those reforms to continue to work, rather than switching to a risky and inadequate defined contribution 401(k)-style system.
We’ll be taking a week off next week, but be sure to check back with us on July 8th for the latest news in the fight for a secure retirement!