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:
- Study Supports DB Plans Over DC Plans for Teachers by Rebecca Moore: this week the National Institute on Retirement Security, in conjunction with the University of California-Berkeley Labor Center, released a new report on teacher pensions. In the six states examined, 77 percent of teachers were better off with a pension than with an ideal 401(k) plan. The study found that in these six states, teachers will typically serve 25 years in the same state, and leave service at age 58. Just another reminder of the importance of pensions in promoting employee retention!
- Here’s What’s On Tap For The 2019 Ky. Legislative Session by Ryland Barton: the 2019 session of the Kentucky General Assembly began this week. It’s still an open question whether the legislature will take up another pension bill this year following the unconstitutional passage of SB 151 last year and the 23 hour special session in December. According to Barton, “Gov. Matt Bevin and Republican leaders of the legislature argue that the state has to weaken retirement benefits for future state workers in order to minimize the state’s financial risk. They have largely ignored calls to raise revenue with proposals like opening the state up to casino gambling, closing tax loopholes or increasing taxes [emphasis added].”
- Thayer says GOP urged Bevin not to call special session by Adam Beam: Republican legislative leaders in Kentucky told Governor Matt Bevin not to call a special legislative session regarding pensions last month, but he ignored their advice and called it anyway. Now, Republican political leaders in the commonwealth are publicly feuding with each other. This Republican infighting could prevent passage of another pension gutting bill this legislative session.
- Credit agency rebuts Gov. Matt Bevin’s warning about pension bill by Phillip Bailey: this week the credit ratings agency Fitch publicly rebutted Kentucky Governor Bevin’s assertion that the state supreme court striking down SB 151 would hurt the state’s credit rating. “Instead, the agency said, it is the state’s ability to fully fund retirement benefits and end a reliance on one-time funds to pay for them that matters most. ‘Given the modest savings anticipated, the proposed pension benefit changes, and any related litigation, would not affect the state’s rating,’ the report said.” This statement by Fitch reaffirms that fully funding the pension systems is the most important thing Kentucky can do to improve the health of its pension plans.
Be sure to check back next week for the latest news in the fight for a secure retirement!