Welcome to this week’s edition of This Week in Pensions! This is the news you need to know in the fight for a secure retirement.
Before you dive into our top stories from this week, check out some stories of public employees helping their communities during the coronavirus pandemic.
Here are the top stories from this week:
Crisis Amplifies Concerns About Retirement Gap for Women by Mike Moen. In an article for Public News Service, the author highlights how the gender wage gap negatively impacts women’s retirement security. “The pandemic has disrupted plans for a secure financial retirement for many Americans,” Moen writes, “and financial experts say women face a more difficult recovery than men.” The data support this assertion, as women in Iowa earn 78 cents to every dollar a man makes, giving women less income they can use to save for retirement. Melissa Peterson, a government relations specialist at the Iowa State Education Association, noted in Moen’s piece that “the state does have a strong public pension system that helps narrow such gaps.” This is one of many reasons why protecting pensions is more important than ever, especially for female public employees.
Poll finds Florida voters back infrastructure plan, dislike proposed pension reform by Jacob Ogles. The Florida State House is currently considering Senate Bill (SB) 84, which would close the Florida Retirement System (FRS) to nearly all newly hired public employees. On Tuesday, national polling firm Raba Research released a new poll, which shows the majority of voters in the Sunshine State oppose closing the FRS. Of the 571 voters surveyed, 71% said they did not support making changes to FRS. As the state legislative session draws to a close next Friday, Florida legislators should listen to their constituents and preserve the FRS, which has consistently been ranked one of the most well-funded pension systems in the country.
Milliman analysis: Public pensions’ funded ratio hits new high at 79.0% in Q1 2021 by Milliman, Inc. This past Monday, Milliman, Inc. shared its latest findings on the funded statuses of the nation’s 100 largest public pension plans. The firm found that the average funded ratio of the plans increased from 78.6% in December 2020 to 79% during the first quarter of 2021. At the beginning of the coronavirus-induced economic crisis, some misleadingly argued that it would somehow harm public pensions. However, pension plans are pooled collectively and are specifically designed to be invested for the long-term, enabling them to withstand market volatility better than defined-contribution plans like 401(k)s.
Millennials Already Planning For Retirement: Nationwide Study by the Nationwide Advisory Solutions. Contrary to media stories of millennials being too obsessed with avocado toast to care about their financial future, a new survey from Nationwide Advisory Solutions shows that millennials have been actively preparing for retirement. 81% of millennials surveyed said they had a plan to protect their assets if they outlived their savings. However, the same report also illustrated that millennials were more likely to experience the negative side effects of the economic downturn, as more millennials than either Generation X or baby boomers said they would experience a pay cut or lose their job as a result of the pandemic. There is one thing millennials love more than avocado toast, however: pensions! According to the National Institute on Retirement Security (NIRS), 84% of state and local public employees who are millennials say their pension benefit is a reason they stay in their job, and 71% of them say they would be more inclined to leave their job if their benefit was cut. Pensions are a proven tool to help recruit and retain highly qualified public employees at every level of experience, including for the millennial generation.
Be sure to check back next week for the latest news in the fight for a secure retirement!