Welcome to the latest edition of This Week in Pensions! We have gathered the best stories about pensions and retirement security from the previous week. This is the news you need to know in the fight for a secure retirement.
Check out our latest blog!
Are pensions set for a major comeback? We sure think so. Read our latest blog, A Good Time for Pensions: Why the Time is Ripe for a Secure Future, from NPPC Executive Director Kendal Killian here.
The battle to restore pensions in Alaska is up to the House now.
After Alaska State Senators voted to pass Senate Bill 88 last week, the chance to restore defined-benefit retirement plans to public employees is closer than it’s been in nearly two decades. But the bill’s reception in the House presents a challenge to supporters, as details about the bill face contention from members of the House. Among the chief concerns in the state is the recruitment and retention of public employees–Alaska has been struggling with historic vacancy rates in the public sector, causing service interruptions in public safety, SNAP assistance, snow removal, and many other vital public services. Senator Cathy Giessel discussed the vast shortages, saying, “It just goes on and on, so that it’s reached a critical situation, so we believe that a defined benefit retirement system would not only keep people here – we want to keep them – but also help with recruitment.”
Kansas retirement plan for public employees shows weaknesses in the latest audit.
In 2015, Kansas lawmakers created Tier 3 of the Kansas Public Employees Retirement System (KPERS), which raised worker contribution requirements, increasted vesting periods, and lowered financial rewards–and a recently-released audit of the system determined that KPERS Tier 3 falls short of the retirement systems in nearby states.
After the addition of Tier 3, the KPERS’ funded ratio rose from 67% in 2015 to 73% in 2022. Still, auditors questioned if the if transition to KPERS 3 or the overall upward direction of the market was responsible. There has been interest in moving all KPERS 3 members into KPERS 2, which would mean a more secure retirement for state employees–and would safeguard against losing quality workers to nearby states or private-sector businesses with more attractive benefits.
Will Gen Xers even get to retire?
Generation X faces uncertainty as they will be the first generation to retire in America without defined benefit pensions. Due to the widespread trend of replacing DB plans with less secure defined contribution 401(k)-style plans–set in place by generations who retired comfortably–Gen X are the guinea pigs in this societal experiment. Shifting the responsibility to save for retirement from employers to individual employees has left Gen X woefully unprepared for their golden years, according to the latest from Fortune magazine. “Gen Xers reported that on average they will need roughly $1.1 million in savings to retire comfortably, yet they expect to stop working with only about $660,000 saved–a savings gap of around $450,000,” writes Tiffani Potesta, “Unless this profoundly changes, many of us will not be able to maintain our standards of living in retirement.”
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.
