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.
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Educators are some of our most valuable public employees. In case you missed it, check out our latest blog, Back to School, Back to Advocating for Teachers’ Pensions!
In The Struggle For Public-Sector Workers, Pensions Help
This week, Dan Doonan, the director of The National Institute for Retirement Security, highlighted in Forbes significant the impact defined benefit pension plans have on recruiting and retaining public employees.
Defined benefit plans offer a guaranteed income for life after retirement, providing security that few other benefits can match. This assurance creates a strong incentive for employees to stay in their jobs long-term, knowing they will be rewarded with financial stability in retirement. In fact, research consistently shows that pensions are a key factor in keeping public-sector workers in their careers for decades.
The truth is that the public sector will likely never outcompete the private sector in pay. Actually, private-sector employers can almost always offer a higher salary than public-sector employers in direct competition for talent. However, what the public sector lacks in salary, it offers competitive benefits such as pensions, which workers have said they want.
Public-sector jobs, such as teaching or firefighting, often require years of training and experience for workers to reach their peak effectiveness. This training often comes at a cost to employers and taxpayers.. Therefore, it’s in the public’s interest to retain these skilled workers for the long haul, ensuring that the investment in their training pays off in the form of experienced, capable employees who continue to provide high-quality services.
When these pension plans are robust and available, turnover is reduced tremendously. In a study of six teacher pension plans, turnover in the middle years of teachers’ careers was remarkably low, a result of the power of a defined benefit pension plan. By offering long-term retirement security, pensions not only attract public-sector workers but also help keep them in their roles for the duration of their careers, ensuring the continuity and quality of essential public services.
In Fairbanks, Dibert and LeBon Are Rematched for State House Election
Two years ago, Democrat Maxine Dibert defeated Republican Bart LeBon for the state House seat representing downtown Fairbanks.
The two are facing off again this year in a district closely divided between Republican and Democratic-leaning voters. With the state House also closely divided between a Republican-led coalition and a predominantly Democratic one, the result in Fairbanks likely means a great deal for control of the House overall.
This also means that the return of a pension plan for public employees in Alaska is at risk. After a failure of the plan to return after much debate from a divided legislature, the winner of this election will significantly impact if it returns.
LeBon is opposed to the pension returning, citing program costs and debt left over from the previous plan. “You’ve got to convince me that it’s not going to create an unfunded liability like the one we’re still looking at today,” LeBon said.
Dibert supports the return of a defined benefit plan, arguing that this would effectively recruit workers and address the public employee shortage in Alaska.
“Teachers are leaving, and it’s really hard right now to attract and retain teachers and police officers and firefighters. I think that a solution would be returning to a modest retirement pension system,” she said.
Dibert says she’s willing to serve in a tripartisan House majority, including Democrats, Republicans, and independents in leadership roles. To that end, she says the past two years have proved she can work across party lines in that kind of majority.
LeBon said he believes that this year’s election results will lead to a coalition majority because any majority needs at least 23 members to be effective. Neither Republicans nor Democrats will hold 23 seats.
This will be an impactful race on both the makeup of the House and the future of pension plans for public employees in Alaska.
City Council backs historic contracts with police and firefighter unions
Police and firefighters unions in Jacksonville won a victory in contract negotiations with the city, resulting in significant increases in pay to employees as well as a return of pension plans to new recruits.
Todd Norman, chief of employee and labor relations for the city, said when Jacksonville ended pensions for new hires in 2017, city leaders expected others in Florida would do the same. That didn’t happen. “The pension is still the gold standard in public safety,” Norman said. “It’s the ‘golden handcuffs.’ It keeps folks on board, and it’s what is expected.”
He said that combined with pay raises and higher starting salaries, the city will be able to “hire and retain the best and brightest first responders.”
Recruitment issues are widespread nationwide and precisely so in states and municipalities without pension plans. By allowing current employees to switch to the pension plan and automatically enrolling new employees into the pension system, Jacksonville will face significantly fewer hurdles in retention.
The labor contracts also would return pensions for corrections officers. Still, the city would need to get a change at the state level to allow corrections officers to make that move without doing the same thing for all city employees.
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.