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
We often hear businesses needing more workers or struggling to build stable talent pools. The worker shortage epidemic has become the new normal, as the issue is constantly echoed in the media and permeates many everyday conversations. The public sector has not been immune to these challenges. Communities everywhere feel the impact of public shortages–read more about how pensions curb staffing shortages in our latest blog!
Bill to boost Social Security for public workers heads to a vote.
Federal lawmakers are set to vote on the Social Security Fairness Act after garnering enough support to force a vote in the House of Representatives. The bill would repeal the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), which affects almost three million public servants, including teachers, first responders, and other state and local government employees. Enacted in 1983, WEP GPO was designed to prevent workers in the public sector from “double dipping” in retirement by collecting both Social Security and pensions, including survivor benefits from a spouse.
However, years of pension reforms and system closures have left scores of public employees undersupported in retirement. Mary Johnson, an independent Social Security and Medicare policy analyst, told USA Today, “These are people who earned credits toward Social Security benefits from second jobs outside of their career in government-paid jobs. They should not be penalized for having worked as firefighters, teachers, or any other government job. Hardworking people deserve to receive the full amount of their Social Security benefits.”
Kentucky firefighters discuss retirement and healthcare with lawmakers.
The Kentucky General Assembly slashed benefits for first responders almost a decade ago, opting for a cash balance plan over defined-benefit pensions. Now, the consequences are catching up with them. This week, lawmakers heard from firefighters and advocates, including Kentucky Professional Fire Fighters Political Director Jeff Taylor, about the devastating effects of the loss of a pension plan on recruitment and retention.
“We’ve got to do a better job to get those younger people in,” Taylor said. Representatives from the Kentucky Public Pensions Authority supported reinstating firefighters’ pensions, adding that the fund is on track to be fully funded by 2049.
Earlier this year, NPPC traveled to Kentucky to speak with firefighters about their hardships and hopes regarding changes to their retirement options. Watch the video here.
As the general election nears, Alaskans speak up about the importance of reinstating a defined benefit pension system.
In the 2022-2024 legislative session, lawmakers in Alaska came closer than ever to reopening the long-closed pension system to state and local government employees. Plagued by years of growing vacancies and subsequent challenges in providing essential public services such as snow plowing, school transportation, and SNAP benefits, the 49th state has encountered a growing debate on how to solve the crisis.
Several key electoral races in Alaska may affect the General Assembly’s ability to draft and pass a similar bill in the upcoming session, and public employees are speaking out about the dire need to address the retirement shortcomings affecting the state. This week, two op-eds in the Anchorage Daily News echoed the sentiment. Patrick McCormick, a longtime Alaska public employee, wrote about the lack of incentive for workers, including himself, to stay in Alaska. “I know that if I had a defined-benefit pension, I would retire as a public employee with a lifetime of service dedicated to the state I love; without it, I’m not sure I can afford to make that sacrifice.” He added, “As a state, we must decide: Do we want those who make state government happen on a day-to-day basis to have experience or not? The answer to this question must inform our perspective on the pension debate.”
Richard Kern, a retired Alaska educator, reiterated the economic need for legislators to revisit the pension discussion next year. “Alaska faces a crisis with hundreds of vacancies among police officers, Alaska State Troopers, and teachers. Reform of our broken pension system is essential to fix this problem,” he wrote. “If ideological special interests succeed in blocking reform, the impacts will be felt most acutely by small businesses who need adequate policing for safe streets, and all businesses who are struggling to recruit employees at a time when families are leaving Alaska due to de-funding of the public education system. This year’s election presents a stark choice: Do we fund police and schools, or allow outside interests to destroy the most basic services that the private sector needs to thrive?”
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.