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:
Pensions a Valuable Tool in Efforts to Solve Teacher Shortages by PERA on the Issues. While we continue to see an alarming number of teacher vacancies throughout the country, pensions remain valuable in retaining and recruiting educators, as noted in this article from the Colorado Public Employees’ Retirement Association (PERA). According to Denver-based Public Education and Business Coalition (PEBC), the state had close to 7,000 position vacancies but only 3,000 graduates from teaching programs in the 2020-2021 school year. PERA also cited survey results from the National Institute on Retirement Security (NIRS) which showed that 90% of survey participants “agreed that teachers and school staff should have access to a pension for retirement security, and 94 percent agreed that elected officials should ensure those pensions are adequately funded.”
New financial report released by Palm Beach reveals budget surplus, record golf course revenue by Jodie Wagner. Palm Beach’s Popular Annual Financial Report was released after more than a decade, revealing that the town had a surplus of $2.3 million for the 2021 fiscal year. This shows how far the finances have improved for the town in the last decade. As we have highlighted, in 2012, the town of Palm Beach closed its pension system to all future public safety officers and offered new employees a hybrid-style retirement plan. This change ended up costing the town a lot of money with officers training with Palm Beach and then transferring to a jurisdiction that offered a pension, leaving 60% of the force with less than three years of experience. Eventually, training costs ballooned to $20 million. After four years, the town re-opened its pension plan for public safety officers.
Unfunded state pension liabilities grow to $8.28 trillion by Brett Rowland. The American Legislative Exchange Council, a problematic think tank bankrolled by the Koch brothers, released a “report” that grossly overinflates public pension funds’ unfunded liabilities by using a 4.5% discount rate. However, this report by the National Association of State Retirement Administrators (NASRA) shows that the average investment return for the past 10 years was 9.6%. Jonathan Williams, the chief economist and executive vice president of policy for ALEC suggests that states need to switch from defined-benefit plans to 401(k)s in order to “improve” unfunded liabilities, but as we have stated many times, this actually makes unfunded liabilities grow and only feeds money into the pockets of Wall Street bankers and takes money away from hard-working, deserving, public servants.
Be sure to check back next Friday for the latest news in the fight for a secure retirement!
