Welcome to the latest 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.
Solution to retaining teachers isn’t tough by Anne Adasiak-Andrew. Published in the Anchorage Daily News, Adasiak-Andrew’s letter to the editor argues that Alaska’s teacher recruitment and retention issues don’t require some grand solution to fix. As we’ve written about before, Alaska is a cautionary tale for states and municipalities looking to close their pension systems and switch to a 401(k)-style plan. After closing its Public Employees’ Retirement System (PERS) and Teachers’ Retirement System (TRS) in 2005, Alaska has had difficulty recruiting and retaining public employees, including teachers and state troopers. The recruitment of teachers costs the state roughly $20 million a year, and some school districts have to offer $3,000 signing bonuses to recruit new teachers. The Alaska Department of Safety also cites the lack of defined-benefit pensions as a barrier to recruiting state troopers around the state. In Adasiak-Andrew’s letter, she states, “There is no need to continue throwing money at researching the problem. The Legislature needs to fix the mess it created and make it financially viable for teachers and public employees to stay here. The facts haven’t changed for 15 years.”
Speaking out: As legislators seek public sector pension changes, caution is warranted by Ellie Shockley. In this piece for The Bismarck Tribune, Shockley urges prudence when it comes to reforming North Dakota’s retirement system, NDPERS. She warns that tentative plans to move from a defined-benefit plan to a defined-contribution plan amounts to a pay cut: “Low pay undermines worker recruitment and retention. The public services we rely on are put in jeopardy when positions go unfilled and high employee turnover damages the quality of services. Our public servants — neighbors, friends and relatives — deserve pay and working conditions that are adequate for a decent life. When we offer them less, they quit, often aren’t replaced, and their former responsibilities are assigned to colleagues with already-full plates. This cycle can repeat until entire departments are gutted.” Learn more about how changing to a 401(k)-style plan from a pension plan has negatively impacted recruitment and retention rates in states and municipalities.
State standout: Audit finds Oswego police pension fund at nearly 90% funded by John Etheredge. In a report analyzing municipal pension funding levels across Illinois, Wirepoints, a nonprofit that produces original research and commentary about Illinois’ economy and government, found that out of 175 municipalities, 99 had police, fire and municipal pension funds that were less than 60% funded. There was one standout, however: the village of Oswego’s police pension fund. Oswego officials cite their commitment to fully funding as the key to their success. “The village has been aggressive in ensuring the village’s police pension is funded so that we are prepared to meet those obligations in the future. This commitment not only helps Oswego residents, but also shows our commitment to our police officers who serve our community each day,” says Village President Troy Parlier. The best way to honor the service and commitment of public employees is to ensure that states and municipalities consistently pay their share into their pension systems.
Interim study examines defined-benefit pension plans for state employees by Steve Lewis. A bill introduced to the Oklahoma legislature by Representative Avery Frix and Senator Dewayne Pemberton would reverse a 2014 bill which ended the defined-benefit pension plan for new state employees, replacing it with an inadequate defined-contribution plan. Last week, a committee that was assembled to study the economic impact of Oklahoma’s defined-benefit pension plans heard testimony on this subject. Conclusive evidence was presented that not only are defined-benefit pension plans better for state employees by supplying a secure retirement befitting their lifetimes of service, but they’re also better for Oklahoma’s bottom line.
Be sure to check back next week for the latest news in the fight for a secure retirement!