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.
Before diving into this week’s news, be sure to check out our newest blog by Ariel McConnell, discussing the latest attacks on teachers and the threat it poses to their ability to retire securely.
On Tuesday, lawmakers in North Dakota advanced House Bill 1040, putting the retirement security of thousands of public employees at risk. The bill aims to transition the state out of its current defined-benefit plan and into a less secure 401(k)-style system. With an anticipated price tag of $5.5 billion, HB 1040 would be the most expensive bill in North Dakota state history. Senator Dick Dever, who opposed the bill, said, “We were out shopping, and somebody came up to me and said, ‘I want to thank you for your work on PERS (Public Employee Retirement System). He said, ‘I’ve been with the state for 21 years, and I would not have stayed with the state, except for the defined benefit.”
Now on its way to the appropriations committee, this bill has support from pension opponents like the Reason Foundation and poses a dire threat to the financial health of the North Dakota Public Employees Retirement System, the state budget, and the public employees who show up to serve their communities every day. NPPC remains steadfast in our efforts to halt HB 1040. If you want to keep updated on the situation in North Dakota, add your name here.
In Alaska this week, where the effort to put pensions back in the hands of public employees after 17 years rages on, The Clarion Peninsula published a detailed overview of the history of Alaska’s retirement system and the effect that offering a 401(k) style plan has had on public employees–specifically teachers–in the state. Currently, Tier III of the Teachers’ Retirement System (TRS) teachers become 100% vested after 5 years of employment, priming educators to take their 401(k)s and make an exodus from the state in search of more secure benefits. Research from Senator Cathy Geissel’s office supports this pattern.
Nathan Erfurth, president of the Kenai Peninsula Education Association, said, “You’re taking a gamble that your money is going to last as long as you do. So there’s kind of a life expectancy question, like, how many years am I planning to live after I’m done teaching? Do I have enough money to do that? I don’t know, because I can lose 18% of the value in a given year because it’s tied to the stock market.”
“When I talk to Tier III teachers, everybody has an exit plan,” he said.
Be sure to check back next Friday for the latest news 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.