Welcome to this month’s first edition of This Week in Pensions! This is the news you need to know in the fight for a secure retirement.
Before we dive into our top stories from this week, we wanted to take a moment to remember AFL-CIO President Richard Trumka, who passed away yesterday. Trumka was a dedicated advocate of defending all workers’ retirement security and devoted his career to lifting up the voices of working Americans.
Here are the top stories from this week:
Public pensions in Texas should keep us up at night by Michael Taylor. In an article for the San Antonio Express-News, Taylor misleadingly argues that the low funded status of the Texas Employees’ Retirement System (ERS) means all public pensions across the country are somehow in fiscal distress. This is not true for several reasons. First, Taylor does not identify the main culprit for ERS’ low funded status. While public employees have contributed their fair share to ERS with each and every paycheck, state lawmakers have repeatedly deferred or skipped their required contributions to ERS, which threatened the fiscal health of the system. The state underfunding is not mentioned anywhere in the piece, which is important context to understand how ERS’s funded ratio arrived where it is today. He then unfairly cites ERS to make an illogical leap that all public pensions are in jeopardy, writing that “my own simple model of public pensions is that they’re all time bombs, quietly biding their time until they explode and rend a massive fiscal hole in the fabric of society.” That dramatic hyperbole couldn’t be further from the truth, as the vast majority of public pension plans are well-funded and have emerged from the coronavirus pandemic-induced economic crisis in excellent shape. Readers of the San Antonio Express-News would be better informed about ERS and public pensions if the newspaper did not publish these outlandish claims that do not hold up to scrutiny.
Expert explains the ‘three-legged stool’ of retirement planning by Stephanie Asymkos. Asymkos writes for Yahoo! News about the three-legged stool of retirement planning. Most retirement experts say that workers need Social Security, a defined-benefit pension, and personal savings to create a three-legged stool that will provide economic security in retirement. However, Asymkos identifies several obstacles that exist for Americans to build the three-legged stool. Those challenges include a lack of defined-benefit pensions in the private-sector, as well as the recent downturn impacting workers’ personal savings, as “a survey conducted back in February 2021 found that 43% of households with incomes of less than $50,000 have no emergency savings set aside.” Thankfully, most public employees still have access to a defined-benefit pension plan, which enables them to retire with the security and dignity they deserve after serving our communities.
Be sure to check back next week for the latest news in the fight for a secure retirement!