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.
Want a functional state? Treat government workers with dignity and respect by Tammy Johnson. You’ve heard us say it–every American deserves to retire with dignity. For public employees in Wyoming, the path to retirement is a rocky one that lacks basic dignity on the job, and Tammy Johnson, executive director of Wyoming State AFL-CIO, says that now is the time for Wyoming lawmakers to change that. Johnson argues that Wyoming public employees are leaving their jobs due to low compensation, poorly maintained equipment, and physical safety, among other driving factors. Workers suffer without adequate compensation and benefits, and we know that offering a defined-benefit pension makes it less challenging for states and local governments to recruit and retain public employees. Not to mention that current Wyoming retirees haven’t received an inflation adjustment in over 14 years. Johnson says, “Collective bargaining would allow public workers to sit down at the table to talk with bosses about everything from pay and benefits to fairness, safety and more, without fear of retaliation.”
Do 401(k) plans unfairly help the wealthy? by Robert Powell. This article discusses new research published by University of Virginia School of Law professor Michael Doran. In the paper, Doran demonstrates how the last 25 years of Congressional reforms primarily benefited high-wage earners, leaving middle to low wage earners behind. Policies that “raised the statutory limits on contributions and benefits for retirement plans and IRAs, delayed the start of required distributions, and, weakened statutory non-discrimination rules – all to the benefit of affluent workers and the financial-services companies that collect asset-based fees from retirement savings. As readers know, NPPC has discussed how 401(k) plans benefit the wealthy and how they continue to contribute to retirement insecurity.
Whitmer proposes cutting taxes, insulin costs in 4th State of the State address by Laina G. Stebbins. This week, Michigan Governor Gretchen Whitmer discussed significant 2022 legislative proposals in her State of the State address. Whitmer wants to repeal the tax on pension and 401(k) incomes of the state’s retirees that was enacted under former Gov. Rick Snyder in 2011. “If we phase it out over the next few years, we can save half a million households in Michigan an average of $1,000 bucks a year,” Whitmer said Wednesday. “That’s money for prescriptions, rent, car payments, or gifts for grandkids.” In a state that has faced several consequential challenges to its public employees’ retirement security, this kind of relief is welcome. Michigan AFL-CIO President Ron Bieber said of Whitmer’s proposal that reform has been a, “top priority of Michigan’s labor movement since former Governor Snyder first taxed Michiganders’ pensions. Retirees across our great state are so grateful to have Governor Whitmer as their champion, always prioritizing their right to retire with dignity and the protection of their hard-earned pensions.” Whitmer’s move also garnered support from The Michigan Education Association (MEA). MEA’s President Paula Herbart praised Whitmer, saying, “Eliminating the unfair retirement tax on seniors is a step in the right direction.”
Be sure to check back in next Friday for the latest news in the fight for a secure retirement!