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.
Pension funds need broader metrics to assess plan health – NCPERS study by Rob Kozlowski. A new report released by the National Conference on Public Employee Retirement Systems (NCPERS) determined three new guidelines to assist funding managers and ppolicymakersin measuring, preserving, and improving the health of state and municipal pension systems.The three new metrics are:
- Scaled liability, which measures pension liabilities against the economy that supports it.
- UAL stabilization payment, which creates an objective measurement of the plan’s cash flow.
- Risk-weighted asset value, which measures asset value against a plan’s ability to withstand market downturns given its cash flow and asset allocation.
The study, which came after a 2019 NCPERS research project determined that Government Accounting Standard Board rules currently hide some risks while overstating the importance of others, aims to provide fund managers with more accurate information to guide their decision-making.
Inflation no reason to lose ground on pension progress by Jim Waters. President and CEO Jim Waters of the Bluegrass Institute for Public Policy Solutions, a Kentucky “free-market think tank” intent on stripping public workers of their hard-earned pensions, believes that essential public employees in Kentucky don’t work enough to merit their lifetime benefit pension payouts. For the record, non-hazardous state employees in Kentucky only receive full benefits after the age of 65, or after 27 years of service. Hazardous members–the employees who risk death, serious injury, or lasting physical hardship to serve their communities–receive their benefits by age 55, or after 20 years. Using language that pits private-sector taxpayers against public employees, who are also taxpayers and who contribute to their pension funds with each paycheck. Though his initial argument stems from a need for funding discipline and proper fiduciary management, the Bluegrass Institute, a State Policy Network affiliate, is not a trusted source for public pension information and seeks to enact policies that harm public workers..
Without pensions, future retirees face financial trouble. Where’s Washington? By Helaine Olen. In her latest opinion column for the Washington Post, Helaine Olen says what we have known all along: 401(k)s are failing American retirees. Citing a study by the Center for Retirement Research at Boston College, Olen discloses that retirees who receive monthly pension benefit payments draw down their savings at a slower rate than people who are relying solely on their own savings and 401(k)s. Initially meant as a supplement to defined-benefit pension plans, the 401(k) quickly became a replacement for guaranteed bbenefits saving businesses and organizations significant amounts of money and placing the burden of retirement savings onto workers who are often uninformed and lack guidance from the financial professionals who run pension systems.
Be sure to check back in next Friday for the latest news in the fight for a secure retirement!