Welcome to the latest edition of This Week in Pensions! We have gathered the best stories about pensions and retirement security from the previous two weeks. This is the news you need to know in the fight for a secure retirement.
Here are the top stories from the last two weeks:
CAFR show pensions still better than 401(k)s by Emma Donahue. In an opinion piece for The Daily Sentinel, Secure PERA’s Program Manager Emma Donahue writes about the release of PERA’s 2018 Comprehensive Annual Financial Report (CAFR). Donahue uses the release of Colorado’s CAFR to show that defined-benefit pensions are still better than 401(k)s. She states, “At the end of 2018, the stock market faced a downturn. The S&P 500 and Dow Jones Industrial Average fell for the first time in three years.” She continues, “Although these numbers are stark reminders of the Great Recession, they explain why PERA saw its investment returns fall to negative 3.5 percent during 2018. On the other hand, workers with only a 401(k) plan absorb those same market conditions on their own. Meaning that worker may delay retirement, especially if they hoped to retire at the beginning of 2019, in hopes to recover the lost assets they need to retire with dignity.”
Correctional officers deserve better by Michael Scribner. In his piece, the President of Keeping the Kansas Promise, Michael Scribner, argues that although Kansas’ correctional officers received a raise this year, it is only the first step to ensuring they get the respect they deserve. He states, “This year, the Keeping the Kansas Promise coalition, as well as other organizations, attempted to move correctional officers from the Kansas Public Employees Retirement System (KPERS) to the Kansas Police and Fire Retirement System (KP&F). This would have provided correctional officers with a better pension, on par with many surrounding states who treat their correctional officers like other safety officers in their communities. Urging legislators to finalize this move will be one of the coalition’s main priorities during the 2020 legislative session. Additionally, our coalition believes that correctional officers’ pay and benefits should be analyzed each and every year to make sure the state is keeping up and staying competitive.”
Retired state workers urge state leaders to hike pensions by Julie Chang. Retired state workers in Texas have not received a COLA in a staggering amount of time: 17 years. In her piece, Chang interviews several retired state workers who are having trouble keeping up. One in particular, Elsa Solis, a state health agency retiree, said, “I tell people if you can work as long as you can work, continue because once you stop, that’s it. You’re on a level that stays like that and everything has gone up.” As the prices of medicine, groceries, and housing have increased in the last 17 years, many retired state workers like Solis are having trouble keeping up. Chang writes about Solis, “Sometimes accepting donations from the food bank and limiting her water use at home, Solis tries to cut costs as much as she can. She said she doesn’t like to accumulate debt after accruing as much as $30,000 in loans while she was raising her two sons on her own on a modest caseworker’s salary.”
Don’t mess with school pension debt to find road money by Royce Humm. In recent months, lawmakers in Lansing have been debating on borrowing $10 billion from the Michigan Public School Employees Retirement System (MPSERS) by “selling bonds to pre-fund the pension plan.” In his piece, Humm, who is the Executive Director of the Michigan Association of Retired School Personnel, writes that borrowing from MPSERS is a terrible idea. He says, “Delaying the MPSERS repayment schedule merely kicks the proverbial can down the road, which is one reason the existing pension debt accumulated in the first place. To be sure, providing much-needed upgrades to Michigan’s roads and bridges is a serious and pressing matter. But it also requires serious funding solutions. We urge lawmakers to resist relying on risky funding gimmicks that will take us off the fiscally-prudent course and potentially cost taxpayers more in the long run.”
Be sure to check back next week for the latest news in the fight for a secure retirement!