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. You need to know this news in the fight for a secure retirement.
Like many states, Alaska is struggling to recruit and retain essential public employees, including public school teachers. This year, lawmakers can restore defined-benefit pensions to public employees through the Alaska Public Employees’ Retirement System (PERS) and the Teachers’ Retirement System (TRS) through several key bills. In a piece for Alaska Public Media, Alaska House majority forms to the right of the Senate’s, Kavitha George discusses the political climate in both chambers of the Alaska state legislature and what that might mean in terms of progress for the state. Notably, the Senate, which organized shortly after the November elections, has focused on several priorities, including increased funding for teacher salaries and reopening the defined-benefit pension system. The House chamber organized just this past week. Alaska lawmakers eliminated the option for a defined-benefit pension plan for public employees, including teachers, state workers, firefighters, and police officers, back in 2006. NPPC recently cited Alaska’s public employee shortage in our new video, Pensions Recruit and Retain Public Employees.
Police departments in all corners of the country are also scrambling to recruit and retain officers. The Jacksonville police department is offering $10,000 hiring bonuses as an incentive for recruiting new correctional officers, and at least one mayoral candidate recognizes that it will take more than a sign-on bonus to keep officers – and hinted a restoration of pension benefit may be imminent. The city stopped providing pensions to all employees hired after October 1, 2017 and replaced that benefit with 401(k) style retirement accounts to lower the city’s pension debt. However, like many other municipalities struggling to keep public employees, cutting pension benefits has done more harm than good for communities.
Also this week, lawmakers in New Hampshire introduced House Bill 50, a bill designed to secure the future of the New Hampshire Retirement System by requiring the state to contribute 7.5% to the NHRS in perpetuity. Ethan Dewitt’s article for the New Hampshire Bulletin, NH cities, towns hope state will make retirement contributions permanent, details a financial timeline in New Hampshire that mirrors the mismanagement made by many state pension systems. For 43 years, the state of New Hampshire contributed 35% to the NHRS to cover the costs of defined-benefit plans for municipal workers. In response to the Great Recession in the late 2000s, the state lowered its contribution rate to 30% in 2010. Then in 2011, they dropped it further to 25%, and in 2013 they brought it down to zero. The state did not contribute to the pension system again until 2022, when lawmakers approved a one-time contribution of 7.5%, relieving cities and towns of a small share of their burden. If passed, the bill would restore a sliver of the promise the state made to cities and public employees back in 1967.
Be sure to check back next Friday for the latest in the fight for a secure retirement! Sign up for NPPC News Clips to receive daily pension news from across the country directly to your inbox.
