Welcome to this week’s 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, check out New Hampshire public employees sharing why their pensions matter for their retirement security.
Here are the top stories from this week:
The Public Pension Crisis: Are Your Taxes Going To Go Up? by Steve Forbes. In an article for his magazine, Forbes falsely asserts that public pensions are in a state of supposed “crisis” that will somehow jeopardize taxpayers. The National Conference on Public Employee Retirement Systems (NCPERS) has illustrated that the first assertion is incorrect because the vast majority of public pensions are well-funded despite the market uncertainty during the pandemic-induced economic downturn. NCPERS has also debunked the notion that public pensions are a liability for taxpayers. In 2016, public pensions contributed $277.6 billion in state and local tax revenues. During the same year, state and local governments contributed $140.3 billion to public pensions, making pensions revenue generators. Forbes’ arguments are not supported by the facts on how fiscally sound public pensions are for both taxpayers and state and local governments.
Across Generations, Middle Class U.S. Households Have Few Financial Assets, According to New Analysis from the National Institute on Retirement Security by the National Institute on Retirement Security (NIRS). Yesterday, NIRS shared new research on how the middle classes of the millennials, Generation X, and baby boomer generations own a low amount of financial assets compared to their wealthier counterparts. NIRS found that, in 2019, middle-class millennials owned 14% of their generation’s financial assets. These numbers decrease even more for Generation X and the baby boomers, with middle-class members of Generation X owning 8% of their generation’s financial assets and middle-class baby boomers owning just 6%. These findings have negative implications for each generation’s retirement security. For example, assuming all of their financial assets will be used for retirement, middle-class baby boomers had an annual income of less than $2,000 in 2019, which is not nearly enough to retire with security. However, one of the NIRS’ recommended solutions to strengthen middle-class workers’ retirement security is to protect defined-benefit pensions, which offer a modest but guaranteed benefit that ensures they do not fall behind in retirement.
Be sure to check back next week for the latest news in the fight for a secure retirement!