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:
- Don’t confuse public pension cost with generosity by Alicia Munnell: the director of the Center for Retirement Research argues that the true reason behind rising pension costs is underfunding by state governments, not the generosity of pension benefits. The cost of funding pension benefits in a given year has remained stable across time. If anything, Munnell claims, pension benefits have become less generous over time.
- Kentucky Supreme Court to hear pension reform lawsuit in September by Meaghan Kilroy: following an appeal of a circuit court ruling by Governor Matt Bevin, the Kentucky Supreme Court has agreed to hear a lawsuit over the pension-gutting law that was hurriedly passed this spring. The case will be heard in September and the justices are expected to rule quickly. If they uphold the circuit court ruling, the pension-gutting law will be struck down for the unconstitutional way in which it was passed.
- Protect PERA by Norm Bangeman: a Pueblo, CO, resident writes to warn about the attacks on PERA by Colorado State Treasurer and gubernatorial candidate Walker Stapleton. Bangeman points out that Stapleton has been criticizing PERA for years and that, while he may tone down his rhetoric during the gubernatorial campaign, PERA recipients should still be wary.
- State’s pension fund is in good shape and getting better by James Maxon: the chairman of the Board of Trustees of New Mexico PERA explains how the board is already taking action to improve board governance and investment strategy to assure the long-term health of the PERA system. He also warns “that simply switching employees to a 401(k) model is far from a magic bullet. In fact, such a switch would have no impact on the current liabilities of PERA, and study after study has shown that a defined benefit model like PERA’s is the only one that provides a safe and steady source of retirement income.”
- When it comes to NC pension’s unfunded liability, ‘the sky isn’t falling’ by Richard Rogers: the executive director of the North Carolina Retired Governmental Employees Association argues that “intimidating numbers are circulating that falsely negate the strength of North Carolina’s public pensions.” In fact, North Carolina has some of the strongest public pension systems in the country, as we detailed in a 2016 report.
Be sure to check back in the weeks ahead for the latest news in the fight for a secure retirement!