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:
- Hogan’s 401(k) plan by The Baltimore Sun editorial board: Maryland Governor Larry Hogan has proposed creating an optional 401(k)-style plan that future state employees could choose instead of the traditional pension plan. Although he is proposing this as an option instead of a requirement, we know from years of experience that 401(k)-style plans offer less retirement security than traditional pensions.
- Reject Gov. Hogan’s plan to change Maryland’s public employee pension system by Sally Davies: responding to Governor Hogan’s proposal, a 40 year career public employee writes in to the Washington Post to express her concern. As she points out, the governor’s proposal “will hurt public employees and jeopardize our retirement security.”
- Is the Dallas Police and Fire Pension typical of Texas plans? By Alicia Munnell: the director of the Center for Retirement Research highlights the unique circumstances of the Dallas Police and Fire Pension plan. Compared to other municipal pension plans in Texas, it has an unusually high percentage of its assets in alternative investments and other non-traditional asset classes, as well as an extremely high percentage of its assets in DROP accounts (which can be withdrawn at anytime).
- Palm Beach general employees in line for better benefits by William Kelly: last year the city of Palm Beach, FL returned to a defined benefit pension plan for its public safety employees (instead of an unpopular hybrid retirement plan). This year, the city council is working to improve benefits for its general government employees. Those employees will remain in a hybrid plan, but the pension component of the plan will be strengthened.
- State employee pension changes being mulled by Missouri lawmakers by Kurt Erickson: a report last year found that Missouri’s state workers are the lowest paid in the nation. One proven way to attract and retain quality employees is offering a defined benefit pension. Legislation introduced this year in Missouri would shorten the vesting period for the state pension plan from the current 10 year period to a 5 year vesting period.
- Committee approves bill that would restore state’s pension promise by Nick Reid: legislation moving in New Hampshire would have the state resume paying a portion of the employer contribution to public pension plans for cities and towns. Historically, the state government paid as much as 40 percent of the employer cost to provide pensions for municipal employees. The state stopped making any contribution under legislation passed in 2011. House Bill 413 would have the state government pay 15 percent of the employer contribution so that New Hampshire can maintain the promise of a secure retirement for future generations.
Be sure to check back next week for the latest news in the fight for a secure retirement!