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:
- Not just Kentucky: This week, we saw the real agenda behind pension push by Tom Eblen: in a powerful and hard-hitting piece for the Lexington Herald-Leader, Eblen exposes the real forces behind the attacks on public pensions in Kentucky. This is not just a local effort, but a coordinated, national campaign to gut retirement security for working families. Eblen lays out the playbook: “But the biggest issue is that Kentucky politicians short-changed pension contributions for years because they had to balance the state budget and were afraid to raise taxes — in part because of pressure from the Norquist crowd… Having created this crisis, anti-tax politicians are now being pressured to solve it on the backs of public employees and retirees.”
- Days after controversial email, support eroding in House for 401(k)-style public pensions by Jack Brammer: staying in Kentucky, it appears that Republicans in the Kentucky House have abandoned any attempt to include a 401(k)-style component in their long-awaited pension bill. A letter sent last week by right-wing special interests demanding a switch a 401(k)-style plan appears to have had little effect, other than to motivate public employees. Brian O’Neill, a spokesman for the Kentucky Public Pension Coalition, said of the letter: “The letter was insulting and offensive to all public employees.”
- California pensions facing hit as charter schools consider leaving by Adam Ashton: a large chain that operates multiple charter schools in California is considering withdrawing from participation in CalPERS, the large, state public pension fund. This is concerning for a number of reasons. When charter schools opt out of participating in a pension fund, it weakens the overall health of the fund by preventing new, active members from paying into the fund. It also threatens the retirement security of charter school employees, who often receive a worse benefit through an alternative retirement plan. We explored these issues, including in California, in a report released last year.
- Pension fund hits milestone: It’s earning more money than it’s paying out by Adam Ashton: finally this week, we stay in California. CalPERS reported that with its recent strong investment earnings, it is once again earning more than it is paying out in benefits. As with many public pension funds, CalPERS took a big hit during the financial crisis and the uneven economic recovery since has slowed its ability to recoup its losses. The report this week from CalPERS’ chief investment officer marks in a significant turning point as the pension plan moves back toward a strong funded status.
Be sure to check back next week for the latest news in the fight for a secure retirement!