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:
- A Week About Saving…But Are We? by Bailey Childers: NPPC’s Executive Director writes about National Retirement Security Week 2017 or, as we called it, Retirement (In)Security Week. The reality is many Americans are not saving enough for retirement and will face a lower quality of living during their golden years. Childers concludes: “Big solutions are needed to help the near half of Americans who do not have access to a retirement plan through work. The longer we kick this can down the road, the more difficult it will be to address the retirement savings crisis we are facing.”
- Yes on Question 4: Pension change will add stability to system, state budget by Bangor Daily News editorial board: the editorial board endorses a “yes” vote on Maine question 4. Passing this measure into law would make public pension funding more stable. The board writes: “A yes vote on Question 4 will make state pension payments more predictable and stable, without harming state retirees or workers… The math may be complicated, but a longer payback period sought in Question 4 will dampen big swings in what the state has to pay into the pension system from year to year.”
- What Trump gets wrong about 401(k)s by Danny Vinik: there has been a lot of coverage this week about President Trump’s tweet about 401(k)s. This article explains a lot of what Trump gets wrong when he calls 401(k)s a “middle class tax break that works.” Vinik explains: “…the break does relatively little to help the middle class. In fact, most of the benefits of the tax break, which costs the government more than $100 billion a year, accrue to the rich.”
- Congress might take away the 401(k) for the wrong reason by Heather Long: the Washington Post also covered the tax treatment of 401(k) plan contributions. Long writes: “The main reason this idea is under consideration right now is not because Republicans are focused on improving retirement savings. Instead, they need money to pay for large tax cuts… Reducing the tax break is one way for the government to get more money, potentially over $700 billion in the next decade.”
- Pension plan stiffs retirees, helps who? by Lexington Herald Leader editorial board: earlier this month, Kentucky Gov. Bevin and state legislative leaders released a framework for making dramatic changes to public pensions in the Bluegrass State. The so-called “Keeping the Promise” proposal would make harsh cuts to pension benefits for teachers and other public employees across the state. The board writes:
“Oddly, Bevin uses Kentucky’s motto, ‘United we stand. Divided we fall,’ to endorse this divisive scheme. No, Governor, this is every man for himself. Future workers will be guaranteed nothing. If they want to risk a chunk of their wages in the market, the state says it will match a portion of that. If they outlive their nest egg or lose it in a market reversal, well, tough.”
Also this week NPPC released a new report titled A School’s Choice: Retirement Security for Charter School Teachers. You can read our blog post about the report here.
Be sure to check back next week for the latest news in the fight for a secure retirement!