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.
In Case You Missed It…
It’s a new year, and we’re ready to share our top 3 resolutions for 2024. Want to know what we plan to do to protect pensions this year? Read the full blog here!
Michigan retirement reform can improve its recruitment and retention of public school teachers.
Chandra Madafferi, President of the Michigan Education Association (MEA) penned a piece this week discussing the need–and opportunity–for an overhaul of the state’s public retirement systems. Despite teacher pay increases, record school budget funding, and the implementation of more student support programs, Michigan is still experiencing a dangerous teacher shortage. “I believe it is time for state leaders to bring back high-quality, defined-benefit retirement programs for school employees to help end the educator shortage once and for all,” Madefferi says. She continues, drawing on her own experience, “Over the years, many of my friends considered leaving teaching but decided to stay – partly because they didn’t want to lose the financial investment they had made when they purchased their service credit. Back then, it was common for educators to spend 30 years or more on the job. These were experienced, high-quality teachers, coaches, paraeducators, administrators and more, who imparted a lifetime of wisdom to their students.” In 2018, Michigan lawmakers voted to end the hybrid plan then offered to educators in favor of a 401(k) plan.
Connecticut starts new year with better pension funding.
Public employees in Connecticut can rest assured that the trust they put in the State to administer their pension funds responsibly is not misplaced. Like many states across the country, pension system funding history has seen skipped payments and mismanagement that led to low funding ratios. High unfunded liabilities can put systems in jeopardy, but moreso they open the door for pension opponents, such as the Yankee Institute, to make a lot of noise about ditching pensions. At the end of 2023, both the Connecticut State Employees Retirement System (SERS) and the Teachers Retirement System (TRS) had increased their funded ratios from 48.5% to 52%, and from 57% to 59.8% respectively. Fiscal solvency remains a key factor in maintaining healthy retirement systems that public employees can rely on.
Urgent wake-up call: 60% of Gen Z, Millennials have less than $5K in retirement savings.
A recent poll by the financial website YouGov reiterated what we here at NPPC have been saying: the majority of younger, working Americans have little confidence in their retirement savings–namely because many Gen Zers and Millenials have little to no retirement savings, despite having 10-20 years in the workforce. “A considerable portion of Americans are at the nascent stages of saving for retirement or have not started at all,” the report analysis stated. “This is evident with a quarter of adults having made no financial arrangements (24%), and another 15% having saved less than $5,000. Only a sliver, 2%, report having saved over a million dollars.” This news is dismal, but not devastating, as workers of all generations still have time to earn a pension through state and local government employment.
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.
