Welcome to this Valentine’s Day edition of 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:
Past time to support our retired public servants by Paul Shinn. Shinn, a retired public employee and tax and budget analyst at the Oklahoma Policy Institute, writes about why Oklahoma’s retired public employees deserve a cost-of-living adjustment (COLA) this year. Shinn highlights the fact that since a COLA was last granted in 2008, inflation has taken a bigger and bigger bite out of retirees’ incomes, while the cost of everyday necessities continues to increase. “Robust retirement benefits help keep our retired public servants in the middle class,” Shinn writes. “Inadequate benefits can make it difficult or impossible to keep up with costs like health care, utilities and food, let alone enjoying the ‘golden years.’”
How America’s Retirement Dream Became a Nightmare by Pamela Yellen. Yellen writes for Entrepreneur magazine about a new report from the Economic Policy Institute (EPI) that shows 401(k) plans have been a disaster for working people trying to save for retirement. Yellen states that “in 1978, Congress added Section 401(k) to the tax code, creating a tax-deferred way for employees to augment their pensions. These plans were never intended to replace company pension plans, but that’s exactly what has happened.” By 2017, Yellen writes, “only 18 percent of private-sector workers did, and just 15 percent of people participated in one, according to the Bureau of Labor Statistics.”
Educators shouldn’t be an ATM for politicians by Paula Herbart. In this article for Crain’s Detroit Business, Herbart (who is the president of the Michigan Education Association) criticizes the “Pensions for Potholes” scheme some Michigan state legislators are considering. Under the scheme, pension payments would be stretched to pay for infrastructure improvements, amounting to $23 billion in long-term costs. “Michigan’s dedicated educators deserve better than to be treated as an ATM for politicians,” Herbart states. “We need real revenue solutions to fix our crumbling infrastructure and properly fund our schools — not more shell games and gimmicks like Pensions for Potholes.”
Be sure to check back next week for the latest news in the fight for a secure retirement!