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.
We Are Thankful for YOU!
For all of November, in this season of gratitude, we’re dedicating the month to honoring and celebrating the hard-working public employees who keep our communities thriving. Be sure to keep an eye on Facebook and Twitter for shareable graphics, stories, and blogs all about YOU–the public employees and pension advocates we are so thankful for.
Worker Shortages Continue in Alaska and the Governor’s Office Attempts to Suppress Labor Data as Retirement Officials Discover Major Issue with the Current 401(k) Programs
The Alaska Marine Highway is in trouble–a combination of aging vessels and the inability to retain crewmembers has prompted administrators to develop a long-range plan to revitalize the ferry system and prevent future service gaps. Staffing woes caused multiple “no-sail” days this summer, according to Marine Director Craig Tornga. “We didn’t have enough personnel to meet the manning requirements of our certificate of inspection from the Coast Guard,” Tornga said. “So that continues to plague us.” In August, U.S. Transportation Secretary Pete Buttigieg visited Alaska and discussed the possibility of returning pensions to Alaska’s public employees while on board the ferry Hubbard.
Governor Mike Dunleavy’s office faced scrutiny earlier this month when staffers blocked the publication of a recent Department of Labor and Workforce Development study about teacher pay and retention in this month’s edition of Alaska Economic Trends. Trends, published by the Alaska DOL, has long been known as a reliable source of information. Dan Robinson, a 20-year veteran research chief for the Alaska Department of Labor and Workforce Development, wrote of his concerns about the breach of transparency from state administrators in a letter to Anchorage Daily News, stating, “Nonpolitical state government professionals must be willing to initiate hard conversations when an administration oversteps. Unless we stand up in these situations, the state risks losing things like the objectivity and political neutrality of a 50-plus-year economic publication like Trends.” The omitted information concludes that Alaska’s “unique” retirement system has had detrimental effects on teacher retention. Tom Klaameyer, President of the National Education Association Alaska, spoke to Your Alaska Link, explaining, “Frankly, our teachers are the only ones in the country that neither have a pension nor are they eligible for Social Security. And so their financial safety net in retirement is frankly not safe.” He continued, “This was the most inopportune time as we are discussing these labor shortages, especially from my perspective in our public schools, to suppress the data about public schools.”
In another development that furthers the cry for a return to pensions in the Great North, the Alaska Retirement Board issued a sweeping recommendation the closure of an investment management program in which more than 10,000 public employees participate. An independent analysis revealed that participants in the program were charged higher fees and received lower returns than non-participants. As we continue to work toward a new defined-benefit program to replace the system closed to new hires in 2006, the mismanagement of tens of thousands of individual 401(k) accounts fuels the fire for change. “I’m feeling a little duped,” said Susan Ritter, an Anchorage School District teacher who has been unknowingly using a managed account for over 15 years. “Our retirement system is not working. It is not truly providing a retirement for state employees, for public employees,” said Heidi Drygas, executive director of the Alaska State Employees Association.
Does a Blue State Like Connecticut Respect Its Public Blue-Collar Workers?
In an opinion piece by University of Connecticut Political Science Professor Lyle Scruggs, the question is raised: Does living in a Blue state like Connecticut mean that public employees are being treated fairly? Scruggs takes a comprehensive look at the surprising (and resounding) answer–No. Considering the staggering 22% loss of state employees since 2008, which has placed a burden on current employees to deliver services, the minimal wage increases that linger 10% below inflation in a costly state, and the drastic cuts to benefits like health insurance and defined-benefit pensions, it appears that Connecticut’s public workforce is getting a raw deal. While state retirees have had a guaranteed Cost of Living Adjustment totaling 10% since January 2021, current state workers have only had a cumulative increase of less than 7.8% in the same period. This is deplorable in a state where the inflation rate reached 18.4% during those years. Scruggs also describes the deterioration of retirement benefits, saying, “The benefits are less generous: higher effective retirement age, trimming pensionable salary, lower COLA for state pensions, pre-funding retirement health care, and greater participation in defined contribution plans. Pay attention and understand this as well: “Better benefits” were supposed to permit the state to pay lower salaries for similar talent. Remember: many state workers are skilled tradespeople, licensed care providers, engineers, and lawyers; many of these folks could earn higher pay and benefits in the private sector.”
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.
