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.
For years, billionaire-backed, independent groups such as the Reason Foundation and the Koch Brothers have been manipulating and pulling lawmakers’ strings to further their anti-pension agenda.
Read our latest blog revealing which Fortune 100 financial services organization to look out for and the secret motives driving their crusade to undermine retirement security and harm public employees.
In an op-ed for Forbes, Dan Doonan, Executive Director of the National Institute on Retirement Security (NIRS), says Alaska’s severe recruitment and retention issues after the closure of its pension plans in 2005 foreshadows what could happen in other states like North Dakota that are moving away from defined benefit (DB) pension plans. According to a recent NIRS report, Alaska’s experience of closing its DB pension plan for public employees, including teachers, and offering only defined contribution plans has resulted in higher teacher turnover rates, losses of teaching years, and hidden costs to the states. “While teachers are not impacted by the plan closure in North Dakota, other public employees are, and the experience of a state like Alaska foreshadows what is likely to come,” said Doonan. Read more on the article here.
Connecticut state leaders have agreed to a plan to reform the state’s pension system–which Governor Ned Lamont and Comptroller Sean Scanlon say will save state and cities more than $840 million over 31 years. The working group, made up of municipal leaders and labor unions, settled on six reforms, including reforming cost-of-living adjustments, re-amortizing the fund from 17 years to 25 years, increasing the pension calculator for public employees with longer service, creating a deferred retirement option plan (DROP), improving data collection, and how to “make the plan more attractive to new towns.”The hope is that these changes will help to address the state’s long-term pensions liabilities and ensure that state employees can receive the retirement benefits they have earned. “During a time when pension benefits in Connecticut have eroded over the past decade, we are excited this agreement is a win for municipal and BOE employees,” AFSCME Council 4 Executive Director Jody Barr said in a statement.
Teachers in Minnesota are pushing for pension reform at the state Capitol this week. Thousands of educators have lobbied their legislators to increase pension benefits. Unless hired before July 1989, most can’t get a full pension until age 66. A new house bill has momentum and could allow teachers to retire at age 64. For more information, watch on KMSP TV. The Minnesota legislative session ends Monday.
New York State Comptroller Tom DiNapoli urges the importance of recruiting and retaining state and local employees after a report revealed surging overtime costs. The state’s fiscal watchdog report showed that overtime costs at New York’s state agencies increased by 47.2% in 2021, reaching a record of 1.36 billion. According to State Comptroller Tom DiNapoli, the number of people leaving state government jobs far outpaced hiring, causing longer hours on the job for many. The state government workforce has declined from over 180,000 to roughly 142,396 in the last fifteen years. Overtime pay in 2022 averaged $61.46 per hour, nearly one-third higher than the highest average hourly rate. “Overtime is not a long-term substitute for proper staffing levels,” said DiNapoli, “New York needs to continue to attract and retain a range of diverse employees in order to build institutional capacity responsive to 21st century needs, especially in the context of a competitive job market.” As NPPC has covered, state and local government employers already have a solution to worker shortages in their benefits package that nearly all private sector employers lack: a secure and guaranteed retirement—highlighting the unique benefit of defined-benefit pension is something private sectors can’t compete with.
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.