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. You need to know this news in the fight for a secure retirement.
NPPC News
Earlier this summer, the National Institute on Retirement Security (NIRS) released a detailed study uncovering the critical role pensions play in the recruitment and retention of essential public safety workers. Read our analysis of the study in our latest blog, Someone to Answer the Call: Pensions are Crucial to Bolstering Public Safety.
Alaska’s Struggle to Staff Schools Continues
Lawmakers in Alaska are hopeful that several “small tweaks” to education policy will address the ongoing teacher shortage crisis in the state. The new laws, which went into effect on Monday without the signature of Gov. Mike Dunleavy, will eliminate the existing limit on experience-based compensation, allow retired teachers to serve as long-term substitutes, and encourage current teachers to seek certification from the National Board for Professional Teaching Standards with financial incentives.
“This is exactly the kind of targeted and strategic stuff we need to be doing,” said the bill’s sponsor, Rep. Rebecca Himschoot, I-Sitka, and a former teacher. “Every time we can find a measure, no matter how small it is, and put it together with other measures, collectively, we’re going to strengthen our education system in Alaska.”
Educators in Alaska lost their access to defined benefit pensions in 2005 when lawmakers closed the pension systems based on erroneous information from actuaries. Earlier this year, Senate Bill 88, which would have restored pensions for public employees in Alaska, including teachers, was narrowly defeated just days before the end of the session.
City Budget Management is Key to Maintaining Healthy Pension Funds
Much of the anti-pension fodder we hear balances on the often erroneous point that cities and states do not have the income or ability to fund and manage their pension funds properly. However, with the right policies and understanding in place, municipalities can fund their pension systems properly and leverage the benefit as a recruitment and retention tool.
This week, the city of New London, CT, reported it is on track to reach fiscal solvency for its long-term obligations, following “incremental but steady progress” in addressing pension debt. Significant changes to how the city addresses its pension obligations were enacted over a decade ago in 2013, following years of budget mismanagement which created deficits that threatened municipal bankruptcy. These changes, such as using actuarially determined employer contributions (ADEC), ensure adequate funding for the future.
The Associate Deputy Director at the Connecticut Conference of Municipalities, George Rafael, said while a 100% funded pension system is ideal, New London’s 78.8% funded ratio is more than adequate.
“It’s higher than a lot of other municipalities and a better percentage than the state is doing with its plans,” he said.
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.