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.
Before diving into this week’s news, check out our newest blog by Ariel McConnell, discussing the threats anti-pension legislation and messaging have on public sector organizations and their ability to recruit and retain quality workers.
North Dakota suffered a major loss after lawmakers passed HB 1040 on Tuesday. The bill, labeled as the most expensive in state history with a hefty price tag of $5.5 billion, will replace the Public Employee Retirement System (PERS) pension plan, leaving future public employees a less secure 401(k)-style plan beginning in 2025.
The Reason Foundation and other anti-pension groups were key players in swaying the opinions of lawmakers with their anti-pension narratives and antics—misleading them into thinking closing PERS was the best option for the state and future employees. This decision will cost public employers and employees considerably in the coming years.
President of North Dakota United, Nick Archuleta said, “We know for a fact that public employees are paid somewhere between 7% and 12% less than their counterparts that are equally trained and educated in the private sector. We’re going to see that, once you eliminate a defined benefit plan, you’re going to have a much more difficult time recruiting and retaining the talented people you need to do the business of the state.”
A new report from the National Institute on Retirement Security (NIRS), entitled Alaska Teacher Recruitment and Retention Study, reviews the impact the closure of the Teacher Retirement System (TRS) and Public Employees Retirement System (PERS) has had on the state of Alaska and its ability to retain quality employees.
Key findings include:
- Workforce trends indicate that voluntary job exits have been higher in the defined contribution (DC) plan than trends previously seen with the defined benefit (DB) plan.
- A majority of states have taken a different approach by offering a choice or a combination of two retirement plan types.
- Plan demographics and cashflows can impact decision-making as TRS and PERS move toward a spend-down stage.
Read the report to learn more about the study’s findings.
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.