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.
Before you dive into our top stories from this week, make sure you check out stories of public employees helping their communities.
Here are our top stories:
Report – Millennials Are Saving More Than Their Parents – Are You Saving Enough? by John Rampton. Millennials are struggling more than previous generations due to economically unstable times. The rising cost of living and the crippling student loan debt keep millennials from contributing to their retirement. The future of retirement security is unknown for this generation and the ones that follow due in part to the private sector’s ill decision to switch to defined-contribution plans. As NPPC has noted, 401(k) plans do not provide a secure source of retirement for multiple reasons. First, younger employees often cannot afford to contribute to them on their modest salaries due to their student loan debt and rising living costs. Second, workers with 401(k)s are subject to loss of retirement savings during economic downturns. Fortunately, for public sector employees, pensions guarantee a modest lifetime benefit during retirement that is shielded from market downturns.
The Great Resignation Is An Opportunity for RPAs by Fred Barstein. The Great Resignation, an ongoing trend where an alarming number of employees voluntarily leave their jobs due to several factors contributing to job dissatisfaction–including stagnating wages and inadequate benefits–has shifted the power from employers to employees. As employers continue to grapple with ways to recruit and retain employees, it is important to look at what employees say they want. A national survey conducted by Greenwald & Associates found that retirement benefits are more critical to public employees than salary. The National Institute on Retirement Security (NIRS) compiled the findings in a report entitled, “State and Local Employee Views on Their Jobs, Pay and Benefits.” The report stated that 93% of state and local employees feel pensions incentivize long years of public service, while 94% consider pensions an effective recruitment and retention tool. Fifty-eight percent of the survey participants stated that being switched from their pension plan to a defined-contribution style plan would make them more likely to leave their job.
Be sure to check back next Friday for the latest news in the fight for a secure retirement!