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:
401(k)s will be considered unthinkable 50 years from now by Jacob Hacker. In a piece for Vox, Jacob Hacker, a Yale University professor, makes the argument that 401(k)s are not working. He states correctly that i pension plans force people to save and also protects them against investment mistakes while 401(k)s do not. Most Americans don’t put enough money into their 401(k) accounts to save adequately for their retirements, leaving them at risk of living in poverty in retirement. Hacker’s report highlightsthat 401(k)s are working for one group of people: the wealthy, who are able to put away adequate amounts of money.
These people are on the verge of retiring – and they have nothing saved by Nadine El-Bawab. In a piece highlighting the retirement savings crisis in America, El -Bawab writes about the bleak report from the U.S. Government Accountability Office. The report found that 48 percent of American households over the age of 55 have no retirement savings. The piece also gives some good advice on how to increase your retirement savings.
Governor Bevin Vetoes Pension Relief Bill. In a surprise move, Governor Matt Bevin of Kentucky vetoed HB358. Bevin cited the state’s moral and legal obligation to protect the retirement benefits earned by public sector employees. In his veto message, Bevin promised to call a special session of the legislature by July to address quasi-state agencies and pensions.
Push to give Oklahoma state retirees’ raise dies by Carmen Forman. After HB2304 was passed by the State House of Representatives by a 98-3 margin, the State Senate decided to essentially table the legislation until next year. The Senate Retirement and Insurance Committee opted to pursue an actuarial study on a 2 percent COLA, instead of the House’s version of 4 percent. The actuarial analysis will be completed by December 1st of this year, so the legislature can pursue a COLA next year.
Be sure to check back next week for the latest news in the fight for a secure retirement!