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 you dive into our top stories from this week, we wanted to honor and recognize the public employees who responded to the terrorist attacks of September 11, 2001, ahead of its 20th anniversary tomorrow. You can read their stories on how they provided critical services in New York, New York, Arlington, Virginia, and Somerset County, Pennsylvania, on the 9/11 Memorial & Museum website.
Here are the top stories from this week:
Public pensions remain a safe bet for retirees by Dragan Mejic. Mejic, a public employee in Colorado, wrote an op-ed for Colorado Politics rebutting an article criticizing the state of the Colorado Public Employees’ Retirement Association (PERA). “By peddling erroneous data, the author not only undermines his own critique, but he also does a disservice to Colorado policy makers who care about our state’s retirees,” Mejic writes. “The truth is PERA’s investments have performed well for Coloradans who will depend on it for retirement, averaging over 9% returns over the last 30 years and 9.4% over the last 10 years.” Mejic also rebukes the suggestion that 401(k)s somehow are a better option for retirement: “In reality, public pensions remain the most secure way to save for retirement. Public pensions overall perform better, are accountable to workers and their families, and have much lower fees.”
Does the U.S. have a retirement crisis? By Alicia H. Munnell. The Center for Retirement Research at Boston College’s National Retirement Risk Index reveals “that about half of today’s working-age households are at risk of not being able to maintain their standard of living in retirement.” The survey, conducted in 2019, also showed that 58% of pre-retirees were very or somewhat concerned that they might deplete their savings in retirement. It’s clear that too many face barriers in accessing a secure retirement, as “an enormous number of Americans feel vulnerable in retirement,” Munnell notes. “That’s not an acceptable outcome.”
Stark and Growing Economic Inequality Fuels Retirement Insecurity by Dan Doonan. Doonan, the Executive Director of the National Institute on Retirement Security (NIRS), shares findings from NIRS’ recent report on how financial asset inequality can negatively impact retirement security. As we covered on our blog this week, the report illustrated significant gaps in the ownership of financial assets by class and race, which can influence retirement preparedness. In the three generations surveyed (baby boomers, Generation X, and millennials), the top 25% of households by net worth owned the majority of financial assets. And, according to Doonan, “boomer, Gen X, and millennial white households own the vast majority of financial assets, while Black and Hispanic households hold only a sliver.” Doonan’s article is another example of why we should seek to protect pensions, as they guarantee a secure and dignified retirement for public employees.
Be sure to check back next week for the latest news in the fight for a secure retirement!