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:
Concerns over pensions grow as deadline nears by Annie Andersen. This week, Kentucky Public Pension Coalition (KPPC) members Jim Carroll of Kentucky Government Retirees and Larry Totten of Kentucky Public Retirees sat down with Annie Andersen from Spectrum News 1 to discuss a special session of the legislature in Kentucky. On July 1st, quasi-state agencies and regional universities will see a 70 percent increase in their pension obligations unless the state legislature acts. Governor Matt Bevin has drafted legislation that would violate the inviolable contract with public employees in the state as well as turn Kentucky Retirement Systems (KRS) into a “bank.” As a unified coalition, KPPC, NPPC’s affiliate in-state, has called for a special session that would invoke a clean freeze of contributions at their current level, instead of proposing illegal measures that would surely end up in court.
New report compares teacher retirement in Utah and neighboring states by the Utah Foundation. This week, the Utah Foundation released its report entitled Another Bite at the Apple: Comparing Teacher Retirement Plans. The report compares Utah’s pension systems retiree compensation to surrounding states. The report found, among other aspects, that since reform in 2011, “the new teacher retirement plan costs are roughly double the actual invested benefit per new teacher.” This is due to half of the cost still being used to pay down the unfunded liability of the original pension plan. It also found that the old pension plan, offered to teachers who were hired before 2011, was “much more beneficial to career teachers compared to the new teacher retirement plan, which is more suitable to teachers who may switch careers”. It’s important to note that many teachers choose to remain in the profession and those that leave are driven away by economic factors such as stagnant wages or lack of retirement security. The 2011 reform included closing off the pension plan to new hires and giving them a choice of a defined contribution 401(k)-style plan or a hybrid plan. The report is worth a read, and can be found here.
Be sure to check back next week for the latest news in the fight for a secure retirement!