Welcome to the latest edition of This Week in Pensions! We have gathered this week’s top stories about pensions and retirement security all in one place. This is the news you need to know in the fight for a secure retirement.
October is National Retirement Security Month!
Every October, NPPC observes National Retirement Security Month by sharing an in-depth look at the many aspects of retirement security and the critical need to protect pensions for public employees.
In addition to sharing facts and information on Facebook and Twitter, this week NPPC staffer Ariel McConnell penned a new blog, How to Advocate for Retirement Security this National Retirement Security Month and Beyond, detailing just a few of the ways you can join the fight to preserve and promote defined-benefit pensions today. Whether you are a public employee or just a member of a community that depends on the hard work of public servants, your support and involvement are essential to our success.
Pension Support Gains Momentum in Alaska
The Alaska Public Pension Coalition has been hard at work advocating for the passage of Senate Bill 88, a bill that would return public workers to a pension system, replacing the previous system that was closed by lawmakers in 2006. Since then, Alaska has seen a dramatic increase in staff vacancies and a subsequent decline in public service delivery.
This week, a joint op-ed from representatives from ASEA/AFSCME Local 52, APEA/AFT, and Public Employees LIUNA Local 71, emphasized the detrimental effects closing the pensions system has had on the state’s ability to provide much-needed public services. Let’s stop the ‘Neglect. Panic. Repeat.’ cycle of public service delivery addresses the ongoing staffing crisis and its impact on Alaskan communities. Multiple state agencies are struggling to keep employees on the job, and while Governor Mike Dunleavy’s administration recently launched a wage study, the trio points out that wages are only one small aspect of a larger problem.
“Simple economics is the primary reason the state can’t recruit and retain qualified employees in payroll, public assistance, probation, and fish and game, among other agencies,” the piece says. It goes on, “Factor in retirement insecurity, a concern of most public employees hired after a retirement pension was eliminated in 2006, and you can imagine why state workers don’t see a future working for the State of Alaska.”
Retirement Security Was Easier to Attain for Baby Boomers Than For Younger Generations
It’s undeniable that Americans are collectively experiencing a retirement security dilemma. This week, Go Banking Rates published 5 Ways Boomers Got Rich That No Longer Exist as an eye-opening reminder of how challenging it has become for younger generations to adequately save for retirement.
Among the factors is the volatile housing market, which served as a wealth-building vehicle for older Americans who were able to invest while property values and mortgage rates were far more attainable. Similarly, the stock market was kinder to the Boomers than it has been to Gen X and Millenials, as the bulk of their peak investment years has been marred by the Great Recession and the COVID-19 pandemic.
Unsurprisingly, one key component of retirement security that was more widely available to Baby Boomers is a defined-benefit pension. “Many Baby Boomers had access to defined benefit pension plans, which guaranteed a specific monthly income in retirement based on salary and years of service,” stated Taylor Kovar, CFP and CEO at TheMoneyCouple.com and Kovar Wealth Management. “These plans have largely been replaced by defined contribution plans, like 401(k)s, where the burden is on the individual to contribute and manage their retirement savings.”
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.