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 top stories about pensions and retirement security from the previous week.
Happy Public Service Recognition Week! We honored public employees this week in our newest blog. We recognize the hard work and dedication of state and local government workers and the difference they make in our communities.
In Alaska, the Senate Finance Committee held public hearings this week on SB 88, a bill designed to reinstate pensions to public employees. Since Alaska closed its pension systems under poor actuarial advice in 2005, the state has struggled to recruit and retain public employees. Among the speakers in attendance, National Institute on Retirement Security (NIRS) Executive Director Dan Doonan addressed lawmakers with information from their recent report, Alaska Teacher Recruitment and Retention Study: Options and Analysis Supporting Retirement Plan Design, which indicates that switching Alaska’s public employees from defined-benefit pension plans to 401(k)-style defined-contribution plans resulted in more public educators leaving their jobs. The bill’s primary sponsor, Senator Cathy Geissel, spoke to her peers Tuesday, saying, “This is a very modest retirement plan to bring back a defined benefit. A defined benefit retirement system is one that provides significantly more security at the time of a retirement than a defined contribution.”
Following the public hearing, members and lawmakers gathered on the front steps of the Alaska State Capitol in support of SB 88. Speakers included former Anchorage Republican Representative Chuck Kopp with the Alaska Public Pension Coalition, Alaska State Employees Association (ASEA) Executive Director Heidi Dreygas, Dominic Lozano of the Alaska Professional Fire Fighters Association (APFFA), Senator Cathy Geissel, and Senator Jesse Kiehl. Despite the clear support from legislators and the public, this bill is not expected to advance to the House in 2023.
Tuesday’s public hearings overloaded Capitol phone lines.
This week Connecticut lawmakers heard a new plan to overhaul CMERS, the Connecticut Municipal Employees Retirement System. State Comptroller Sean Scanlon addressed longstanding concerns about the system, which was created in 1947 and has participation by 107 of the state’s 169 cities and towns. The new plan will save municipalities $32.3 million over the next fiscal year and $843 million over the next three decades. Designed by a working group of lawmakers and labor leaders, the proposal has six major reforms, including tweaks to calculating cost-of-living adjustments, re-amortizing the unfunded liability from 17 to 25 years, and a deferred retirement option. “During a time when pensions and benefits are under attack, and have been eroded over the past decade, we are excited that this agreement is a win for the municipality, a win for the board of ed employee, and a win for municipalities and taxpayers,” said Jody Barr, executive director of the AFSCME Public Service Union.
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