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
Millions of public servants face unfair cuts to their Social Security benefits because of outdated policies like WEP & GPO. Learn how these provisions hurt retirees and how you can fight for change in our latest blog, Understanding WEP and GPO: Why We Must Act Now.
Ohio House passes bill to boost police pension contributions by cities, but its future is uncertain
The Ohio House of Representatives passed a bill requiring municipalities to contribute $80 million more to police officer pensions. Ideastream Public Media reports that a funding increase from 19.5% to 24% would increase the contribution rate to meet the current level of benefit calculations firefighters receive.
The Ohio Police and Fire Pension Fund is short about $15 million, which has resulted in the elimination of Cost-of-Living Adjustments (COLA) until age 55, enacting a 3% cap on COLAS, and raising the retirement age from 48 to 52.
The bill passed the House 46-25, but there are concerns that there will not be enough time left before the end of the session for the Senate to vote on it. A significant concern among supporters of the bill is that a growing labor shortage will only be exasperated if it fails to pass.
“… the labor shortage among those ranks is going to be the worst this nation has ever seen,” said Brennan, a former Parma city councilmember. “I understand that there’s a cost here, but I believe that that cost is small, considering what it might cost down the road if what I just stated comes true.”
Maryland teachers may be losing thousands from their retirement savings without knowing it
Teachers across Maryland are feeling the pain from expensive plans provided by private retirement vendors. The Baltimore Banner reports that since 403(b) accounts, which are the 401(k)-style retirement plan offered to public school teachers in Maryland, are not subject to the same federal law that mandates employers pick plan providers with the best interest of the employee, many teachers in Maryland are now faced with hidden costs of their retirement plans.
The Banner spoke with a teacher who had been paying over $1,000 in fees since 2007, adding up to around $15,000. This plan was administered by Equitable Holdings, which in 2022 paid a $50 million fine to the Securities and Exchange Commission for misleading over a million investors, mostly public school educators.
Due to a lack of federal oversight in implementing these plans, this type of fee structure is common among vendors, both according to the vendors and the school districts. While this can be a significant concern among some teachers, not everyone shares the same perspective. Cindy Sexton, president of the Teachers Association of Baltimore County, said the union occasionally hears members talk about retirement plans, but “it’s not a pressing issue that’s really come to our attention.”
High-fee privately administered retirement plans undermind retirement security. Pensions provide stable, guaranteed income for retirees at lower costs.
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.