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. This is the news you need to know in the fight for a secure retirement.
Here are the top stories from this week:
We served our communities, now we need an inflation adjustment to survive by Verna Kay Garcia. In this op-ed for the Casper Star-Tribune, Garcia, a retired benefits specialist for the Wyoming Department of Family Services, writes about why she and her fellow retirees need an inflation adjustment to keep up with the price of groceries, health care and more. The last time Wyoming passed an inflation adjustment for retired public employees was 12 years ago. “We need this inflation adjustment or some of us will slip further into poverty, and be forced to rely on the various services I once worked to make sure no one would ever need,” Garcia writes.
The system is flawed when most Americans have little or no retirement savings by Megan Leonhardt. In this article for CNBC, Leonhardt cites a report from Monique Morrissey at the Economic Policy Institute on why most Americans face an uphill climb on retirement security. Nearly 40 million private-sector employees don’t have access to a retirement plan through their employer. Of those who do, the plans are often difficult to navigate because the worker must estimate their lifetime earnings and average market returns to figure out how much to save for retirement.
South Carolina’s largest debt sparks battle over public benefit by Lindsay Street. Street reports from Charleston that South Carolina legislators are considering converting the state’s pension system into a 401(k)-style defined contribution plan in the upcoming legislative session. As we’ve previously covered, 401(k) style retirement plans put all the risk onto individual workers in preparing for retirement. Pension plans, on the other hand, pool risk collectively among workers and are professionally managed, making them a better asset for public employees.
As a New Governor Takes Office, Kentucky Pensions Still on the Brink by Karen Pinchin. In this article for PBS, Pinchin outlines the upcoming political realities facing newly elected Gov. Andy Beshear regarding the state’s two largest pension systems. Despite public employees paying their fair share into the retirement systems throughout their careers, Kentucky politicians have continually kicked the can down the road and refused to contribute the state’s share of the contributions, jeopardizing their financial futures. Previous Gov. Matt Bevin’s solution was to cut much-needed state services such as health care and education to pay into the systems, which earned him the enmity of educators across the Commonwealth (it didn’t help either that Bevin called teachers “selfish” and “ignorant” to a local radio station). Now, Gov. Beshear (who campaigned on protecting pensions and supporting educators) will have to confront these past legacies during his term to move the state forward for its public employees.
Be sure to check back next week for the latest news in the fight for a secure retirement!