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…
As Women’s History Month comes to a close, we’ve highlighted four trailblazers who have helped shape public employment in our newest blog, Celebrating Women’s Contributions to the Public Sector: Trailblazers Who Paved the Way.
An act of fiscal responsibility in Wyoming
Wyoming state lawmakers have taken a significant step toward safeguarding their public pensions. Last week, Governor Mark Gordon signed into law bills to increase contribution rates for Wyoming State Highway Patrol, Game and Fish wardens, judges, and law enforcement officials to attain fiscally responsible funding goals over the next three decades. The Governor vetoed a contribution increase for all other public employees, citing a lack of pay increases across much of the public sector. Wyoming Retirement System (WRS) executive director David Swindell spoke about the need to do some “catching up” to maintain healthy funds for the future. He also added that “the promise of a pension is the number one recruitment and retention tool used to fill positions across the state.”
House Bill 83 was also enacted this year, granting the Wyoming Retirement System (WRS) an administrative mechanism to manage contribution rates in the Public Employee system. This vote of confidence on behalf of legislatures allows the WRS to closely monitor funding levels and make adjustments as needed.
Teresa Ghilarducci sides with Bernie Sanders on retirement
In an article for Forbes this week, economist Teresa Ghilarducci sided with Vermont Senator Bernie Sanders about the severity of the ongoing retirement crisis in America. Noting that “the U.S. has the highest elder poverty rate among the world’s wealthiest nations–by far,” Ghilarducci takes a firm stance on the importance of sound government policy when it comes to providing citizens access to secure retirement. Referring to raising the retirement age as “a dangerous and harmful step,” she warns that pension opponents with Wall Street interests, like Andrew Biggs–who recently spoke out against Senator Sanders, insisting that the current American retirement model is adequate for the majority of the population–can often pad numbers and surveys by focusing strictly on the top 10% of earners in the United States.
Blackrock CEO: America has a “retirement crisis”
Larry Fink, the 71-year-old CEO of Blackrock, the world’s largest multinational investment management firm with over $10 trillion in assets, wrote a letter to shareholders this week warning of a pending national retirement crisis. Fink agrees with what NPPC has been saying for nearly two decades: transitioning from defined benefit pensions to 401(k)s has undermined Americans’ retirement security. “Put simply, the shift from defined benefit to defined contribution has been, for most people, a shift from financial certainty to financial uncertainty,” Fink wrote.
Fink, whose net worth tops $1.2 billion, recognizes that a shift in demographics based on longer lifespans and growing numbers of elderly Americans has put a strain on the retirement system, including Social Security. While Fink’s support of defined-benefit pensions is welcome news, his letter also insinuates that Americans should work longer before retiring.
Aforementioned New School economist Teresa Ghilharducci spoke to CBS News about Fink’s proposal, saying, “After a 40-year-old experiment of a voluntary, do-it-yourself-based pension system, half of workers have no easy way to save for retirement,” she said. “And in rich nations, why isn’t age 65 a good target for most workers to stop working for someone else?”
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.
