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:
- Letter: Reeder spreading pension “fake news”: In her letter to the editor, Susan Christian sets the record straight on Scott Reeder’s recent article. Christian writes “Reeder talked about the pension of a superintendent in a wealthy Chicago area school district. This salary is nowhere near the norm for superintendents across Illinois and certainly not what a retired teacher gets.”
- IPERS’ unfunded pension liabilities total $6.8 billion, will get worse before better by William Petroski: Despite the headline, the report coming out of the Iowa Public Employees’ Retirement System indicates that the fund, which has 360,000 members, is on the right track. The unfunded liability is expected to grow slightly in the next five years before it begins to gradually decline, with zero dollars in liability being achieved in 2046. “What the whole funding policy is designed to do is to make steady progress,” said Brent Banister, chief pension actuary at Cavanaugh Macdonald Consulting, LLC, of Bellevue, Nebraska, which prepared the report. “You don’t turn a big ship around quickly, but when you do you get where you want to go.”
- As pension costs rise, agencies cut jobs – which hurts pension funding by Tom Loftus: Pension systems have a somewhat simple formula to sustain funding levels – employee and employer contributions which generate investment earnings. But when state legislatures don’t adhere to that side of the bargain, the plans can fall into peril. Loftus outlines in his article how Kentucky is dealing with that very problem. “Kentucky Retirement Systems Executive Director David Eager recently warned the state’s Public Pension Oversight Board about the trend of shedding jobs or taking other steps to move employees out of this pension plan. Specifically, Eager said, ‘They outsource, they terminate and employment goes down.’” The more the employer contribution increases, the more agencies attempt to cut employment, which increases their future costs since that would-be employee is no longer making contributions to the system.
Be sure to check back next week for the latest news in the fight for a secure retirement!