Welcome to the latest edition This Week in Pensions! 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 the top stories from this week:
Governor asks SC in speech to boldly roar into the 20s by Jeffrey Collins. In this news article for the Associated Press, Collins covered South Carolina Gov. Henry McMaster’s annual State of the State address. Gov. McMaster encouraged lawmakers to begin enrolling newly hired public employees into a 401(k)-style defined contribution plan instead of the state’s defined benefit pension system as early as this December. This would be a disastrous move for the state’s public employees because defined benefit pensions collectively pool risk, providing more financial security in retirement.
The 1%: Illinois’ pension millionaires by Austin Berg. In this piece for the Illinois Policy Institute, a notorious anti-pension think tank, Berg wrote about how the Illinois public pension system supposedly makes millionaires out of a select number of retired public employees. Berg claimed with cherry-picked evidence that many retired public employees in Illinois will cost taxpayers an arm and a leg in retirement when that couldn’t be further from the truth. The average public employee in Illinois annually receives a modest $36,490 in retirement, according to the National Institute on Retirement Security. And the notion that it’s Illinois taxpayers who are left to cope with pension costs is not true; public employees contribute to their pensions with each and every paycheck.
Living on $738 a month: As Boomers hit retirement, Social Security more important than ever by Julie Mack. In this article for Michigan Live, Mack covered how workers face significant challenges in preparing for retirement. Mack cited a 2016 report from the Government Accountability Office which showed that 29 percent of households headed by someone age 55 or older have no pension plan or retirement savings at all, posing a major threat to retirement security. Michigan could lead the way in solving this problem by reopening its retirement systems. State and local governments can help solve this problem by strengthening defined benefit pensions for public employees again.
Be sure to check back next week for the latest news in the fight for a secure retirement!