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.
City contemplating going back to old retirement plan by Cliff Hightower. Like many municipalities across the country, The Great Recession in 2008 hit the city of Kingsport, Tennessee hard. Facing a lack of cost control, the city closed its defined-benefit pension plan in 2012, offering only defined-contribution 401(k)s to new public employees. But what happened next is a pattern we see over and over when employees lose secure retirement benefits – 558 resignations in the last ten years, twelve percent of those noted retirement as a significant consideration. Now the city is initiating a 90-day study to explore reopening the system as a hybrid model, in the hopes of increasing recruitment and retention. Tyra Copas, the head of human resources for Kingsport, hopes the plan will help keep essential employees on the payroll and attract potential employees who already participate in the Tennessee Consolidated Retirement System. Kingsport is not alone in its struggle to retain and recruit talent. Reintroducing a defined-benefit plan can positively affect employment rates and the local economy.
Senate, House adopt competing bills investing up to $1 billion in state pension system by Tim Carpenter. The 300,000 members of the Kansas Public Employees Retirement System (KPERS) are about to get a solid boost of funds, thanks to a bipartisan effort to manage the system’s unfunded liability. Former Governor Brownback initiated skipped payments as part of his failed tax-slash initiative in 2017, leaving KPERS with a $253 million deficit, but this week the House and Senate approved a $1 billion payment into the system. This cash injection is expected to save the state over $400 million over the next five years. Of the move, Rep. Steven Johnson, R-Assaria, said, “Managing the liability over time is critical. Making a payment of this size is significant,” Johnson said. “Are our retirees deserving of consideration? Absolutely.”
Be sure to check back in next Friday for the latest news in the fight for a secure retirement!