Welcome to the latest edition of This Week in Pensions! This is the news you need to know in the fight for a secure retirement. We have gathered the best stories about pensions and retirement security from the previous week.
Have you checked out our most recent blog? Read up on this blog by Ariel McConnell, discussing the latest attacks on teachers and the threat it poses to their ability to retire securely.
As legislative sessions in many states began to wind down, our focus at NPPC has narrowed to a handful of state capitals where consequential pension-related bills are still being debated.
In an op-ed in the Anchorage Daily News, 23-year police veteran Patrick Messmer expresses the urgent need for an Alaska pension solution, stating, “I am lucky enough to have a pension under PERS Tier III. However, there are only two other people in my department that are Tier III, and we are all set to retire in the next few years.”
Since the close of its public pension system in 2005, the recruitment and retention of public employees in Alaska have been disastrous. “Short staffing caused by retention problems puts officers and the public at risk,” said Messmer. In 2020, an FBI examination found that Alaska has the highest rate of assaults on officers because of the inability to fill positions—resulting in officers taking dangerous calls alone. Messer said that when he and his fellow officers and firefighters testified, many committee members thanked them for their service, but Messer says actions speak louder than words. If legislators are indeed thankful and support first responders and other public servants providing vital services, he urges them to support bills reinstating a defined pension plan.
The North Dakota legislature is in its final weeks, and we anxiously await the verdict on HB 1040–a bill that seeks to close the public pension system and covert public employees to a defined-contribution plan. In an op-ed for Inforum, former U.S. Representative Earl Pomeroy called legislators out for not acting in the best interest of taxpayers or public workers, as converting the state’s retirement program would cost a whopping $5.3 billion. The reasoning for this shift? Wall Street. “Wall Street financial interests are working overtime to scrap the state’s pension so they can sell 401(k) type products as an alternative. 401(k) type retirement programs produce fee income which is way beyond what they can get from North Dakota on pension funds,” said Pomeroy.
There are so many reasons why 401(k)s are not adequate plans for public employees–the risk of outliving savings, investments underperforming over time, and the very real potential of loss of retirement savings during economic downturns are just a few of those reasons.
“Back in the day, I traveled across North Dakota visiting with voters. I often heard from families who did all they could to save for retirement, only to have circumstances beyond their control disrupt their hopes and dreams for their golden years. HB 1040 piles more risk onto North Dakotans in times where we could all use more certainty, not less, when it comes to retirement income,” said Pomeroy.
“The Legislature can do the right thing and continue the retirement program for our modestly paid public employees,” he later continued.
Be sure to check back next Friday for the latest in the fight for a secure retirement! For now, sign up for NPPC News Clips to receive daily pension news from across the country directly to your inbox.