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.
This week, the American Legislative Exchange Council (ALEC) released its annual report on state pension funds, titled Unaccountable and Unaffordable, 7th Edition. ALEC is just one group in a tangled web of billionaire-funded anti-pension organizations that seek to end public pensions in favor of less secure 401(k)-style retirement plans. This year’s report is no different from the previous years in that ALEC continually uses inflammatory language and inflated numbers and percentages to scare readers into believing that the pension sky is falling. As always, NPPC continues to monitor ALEC and their associates to ensure that public employees can retain their defined-benefit pension despite severe opposition.
Alaska has been grappling with a public service crisis since the closure of its public pension system in 2006. Last year, the introduction of Senate Bill 88 brought renewed hope that the state will make an effort to fix its public worker staffing shortage by once again offering defined-benefit pensions to state and local government employees. This week, the Penninsula Clarion published an op-ed by retired educator LaDawn Druce encouraging the public and lawmakers to stymie the ongoing staffing crisis by advancing SB 88 into law in the upcoming legislative session.
“According to an analysis by the State of Alaska, teachers who work a 30-year career with no Social Security only have a 31% chance of not running out of money in their retirement. All of this uncertainty and turnover has major costs too. A 2017 ISER study determined that it costs Alaska about $20,000 per teacher and $20 million per year in recruitment and retention costs,” writes Druce. “It’s not just teachers and educators. This affects all public servants: state troopers, firefighters, paramedics, who go above and beyond to keep us safe.”
This week, Michigan Governor Gretchen Whitmer announced a $553 million grant intended to shore up the pension system, affecting 123 Michigan communities. The Protecting MI Pension Grant awards are part of a fiscal plan to ease financial burdens on small towns and municipalities, freeing up money for other critical services. It also ensures the state takes its fiduciary responsibility to its public employees seriously. “After a lifetime of hard work, Michigan seniors deserve to retire with dignity,” said Governor Whitmer. “Today’s Protecting MI Pension Grants will ensure that Michiganders who served our communities as police officers, firefighters, sanitation workers, and in so many other invaluable professions, will receive the stable, secure retirement that they earned.”
Municipalities in Michigan’s Upper Peninsula reacted to the news with relief. In the city of Norway, which received $3,732,854, City Manager Dan Stoltman said, “We were very excited to receive the news that we would be a recipient of the Protecting MI Pension Grant Program. Helping us get to the 60 percent funded status makes the light at the end of the tunnel a little closer and a lot brighter for our future.”
Be sure to check back next Friday for the latest news 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.