Welcome to the latest edition of This Week in Pensions! As we do most weeks, we have gathered 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:
- Christie signs bill requiring N.J. to make quarterly pension payments by Matt Arco: in a victory for working families, Gov. Christie signed legislation that will require the state of New Jersey to make contributions to the public pension funds each quarter, instead of just once a year. Putting money in the funds earlier in the year gives more time for those contributions to earn investment returns. It’s projected the legislation could save the state $13 billion over the next 30 years.
- Retirement plans healthy, well-managed in Minnesota by Doug Anderson, Laurie Hacking, and Erin Leonard: the executive directors of Minnesota’s three largest public pension systems detail the benefits pensions provide not just to pensioners, but the whole Minnesota economy. As they point out, Minnesota’s public pensions are well-funded and generate a substantial amount of economic activity in-state each year.
- Dallas police and fire pension plan problems caused by extraordinary decisions by Alicia Munnell: the director of the Center for Retirement Research writes that the problems plaguing the Dallas Police and Fire Pension Plan are unique and not representative of the challenges facing other public pension plans. Unusual investment decisions, chronic underfunding by the city government, and an extremely generous DROP program created a perfect storm in which the pension plan was trapped. She concludes: “In short, the Dallas Police and Fire situation is an extreme case and tells us little about public plans in general.”
- Only bankers stand to gain from gutting IPERS by David Thede: Thede challenges a recent Quad-City Times editorial and points out that the financial industry are the only ones who stand to gain if Iowa teachers and other public employees are forced into risky and unreliable 401(k)-style accounts. Iowa’s public pension system is one of the strongest in the country. Abandoning a system that provides a secure retirement for working families would be a mistake.
- Keep those public employee pensions promises by John McTighe: the “California Rule” is a long-recognized legal precedent that says pension benefits promised the day an employee is hired must be preserved because they are a vested, contractual right. McTighe argues that the California Supreme Court must uphold this important legal principle.
We’ll be taking a couple of weeks off for the holidays, but be sure to check back in early January for the latest news in the fight for a secure retirement!