The June 19 editorial “A smart step on pensions” said Pennsylvania’s new law on pensions would give most new state employees a choice of “three retirement savings options similar, in varying degrees, to the defined-contribution plans common in the private sector.” But two of the options are based on a defined-benefit model with a 401(k)-style defined-contribution component. These plans are not similar to the 401(k) option common in the private sector.
I remember those first few real paychecks when I got out of college. It felt like I had all the money in the world! I got a cheap apartment near the Susquehanna River in Harrisburg, I could go out with my friends after work, even take weekend trips down to DC every now and then. Soon though, reality set in: I had a load of student loan debt to deal with. Another important reality hit me several years later: I also needed to save for retirement.
Washington, DC – According to the Washington Post, the budget proposal that President Trump is scheduled to release on Tuesday would undermine the retirement security of federal employees. The proposed budget would require federal employees to pay more out-of-pocket for their retirement benefits, while also diminishing their overall retirement benefits.
Recently, the Mackinac Center for Public Policy — a right-wing think tank funded heavily by the Koch brothers — penned an article attacking the Michigan Office of Retirement Services (ORS) for recent accounting errors. While the errors were real, the alleged inability of the agency to ably handle Michigan’s state-run pension systems was greatly overblown. The Mackinac Center’s goal on this issue is not to create clear public policy. In fact, it is to create a smokescreen so that billions of dollars can be stolen from hard-working Michigan citizens and handed over to their corporate funders.
Washington today is divided. One could say that many of our states are divided as well. With so many marquee issues on the line over the next few years — tax reform, healthcare, Social Security, Medicare — there is one topic both parties can agree on: Americans are not fully prepared for retirement.
If you want a good history lesson, look no further than the Rust Belt. Beyond the relics of America’s industries are hardworking Americans serving as living reminders of the devastating consequences of what happens when cities and states close a public pension plan. In West Virginia and Michigan in particular, you’ll find two narratives about why pensions matter, especially in today’s economy.