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.
As the Private Sector Struggles with Layoffs, Government Employment Opportunities Surge
In a year marked by job cuts in the private sector, the public sector is stepping up its hiring game. Public-sector jobs at federal, state, and local levels have surged by 327,000 positions in 2023, contributing significantly to overall job growth. This hiring boom is attributed to pandemic-induced vacancies and competitive compensation packages.
Government agencies provide benefits such as recruitment bonuses and extended paid leave to attract talent. Job listings for government roles now advertise pay that is 20% higher than last year. In contrast, many private-sector companies are offering lower pay and increased job application hurdles.
Defined benefit pensions add another layer of appeal to public-sector jobs. The security and long-term benefits provided by public pensions serve as a compelling incentive and make government positions formidable competitors to private-sector jobs.
Despite these advantages, state and local governments still face challenges in attracting applicants. Complex language and slower hiring processes are barriers, but the stability and purpose offered by these roles align with what many job seekers desire.
The Push for Tier 2 Pension Reform in Illinois
In a bid to secure vital improvements to Tier 2 pension benefits, members of the American Federation of State, County, and Municipal Employees (AFSCME) and legislative staff from Council 31 took center stage at a legislative hearing held in Chicago earlier this month. The focus of their testimony revolved around House Bills 4098 and 4099, both designed to introduce significant changes to Tier 2 pension benefits for participants in the State Employees Retirement System (SERS), the State University Retirement System (SURS), and other state-funded pension systems.
Among the changes outlined in both bills is a reduction in the normal retirement age based on years of service, a reform urgently advocated for. Martha Merrill, Director of Research and Employee Benefits at Council 31, stated in support of these bills, “AFSCME supports making adjustments to the Tier 2 alternative formula to re-establish equity with others in law enforcement regarding retirement age. These changes are not only a matter of fairness but are also closely connected to safety and staffing.” she affirmed. At the hearing, Charles Mathis, a correctional officer at Stateville Correctional Center, urged policymakers to take action stating, “Having 60-year-old security personnel raises questions about safety within our facilities—not only for staff, but for the population that is housed there. It is only appropriate that the General Assembly take action to adjust the retirement age for Tier 2 security employees in DOC and DJJ to age 55.”
HB 4098 also mandates the state to ensure full funding of the pension systems by the year 2050, securing the financial well-being of retirees, and bolstering the state’s commitment to its workforce’s retirement security.
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.