Alaska Public Pension Coalition

Four Little-Understood Points on State Pension Problems

Fixing underfunded state and local pension programs is a long-term goal that most states can accomplish with moderate, common-sense steps. A major report released from the Center on Budget Policy and Priorities outlines those steps. Here are highlights from the report:

Today’s pension shortfalls were caused in substantial part by the 2001 recession and the recent Great Recession.

Fully funding pension shortfalls immediately would be both difficult and unnecessary.

Many states and localities are already taking steps to improve pension funding.

States and localities can strengthen their pensions without causing large problems for other parts of their budgets or their economies while the economies remain weak.

[Read the full report: A Common-Sense Strategy for Fixing State Pension Problems in Tough Economic Times.]

Social Security: We’re Number…30!

We’ve long emphasized that Social Security benefits are modest — averaging only about $1,100 a month for retirees, disabled workers, and widows.  And they’re also low in relation to earnings.  According to the Organisation for Economic Cooperation and Development, they replace just 42 percent of a median worker’s earnings.  That puts us in 30th place among the 34 OECD member countries.

The Center for Strategic and International Studies has devised a Global Aging Preparedness (GAP) index to rate various nations’ readiness for future demographic changes. CSIS observes that, thanks to its comparatively high birth rates and openness to immigration, the United States is graying less rapidly than many other nations.  People age 60 or older will make up about a quarter of our population in 2040, a figure that several European countries and Japan have already surpassed.  CSIS assigns a low priority to reducing public-pension (i.e., Social Security) benefits in the United States and other “Anglo” nations.  Its top priority for the United States?  Reining in future health-care cost growth.

[Read the full article from the Center on Budget Policy and Priorities.]

 

A Common-Sense Strategy for Fixing State Pension Problems in Tough Economic Times

Pension costs didn’t cause the current state fiscal crisis. And even eliminating defined-benefit pensions — with all the problems that would entail — wouldn’t have much impact on current state budget shortfalls. Rather, pension funding is one of several key structural budget problems that states must address. Most states have generally been responsible in funding pensions, and a large number are already starting to address pension fund shortfalls.

State and local governments need to provide adequate pay and benefits to attract and retain high-quality teachers, nurses, police, and other employees. Currently, the pay of public-sector employees is somewhat below that of their private-sector counterparts: “apples-to-apples” studies find that public workers are paid 4 to 11 percent less than private-sector workers with similar education, job tenure, and other characteristics.

In some cases public employees have foregone wage increases and received benefit enhancements instead. But while benefits are more generous and secure for public employees than for most private-sector workers, factoring in the value of these benefits does not entirely eliminate the gap between the compensation of state and local employees and their private counterparts in comparable jobs.

State and local governments thus should use all the tools at their disposal to solve their pension problems without severely reducing public pensions, which would be an overreaction to current funding issues and hinder states’ and localities’ efforts to attract and keep the workers that teach our children and protect our lives and homes.

[Download “A Common-Sense Strategy for Fixing State Pension Problems in Tough Economic Times” a research report published by the Center on Budget Policy and Priorities.]

Social Security: Vital to Alaska Women and Families

As debate heats up on Capitol Hill about the federal budget, it seems nothing is safe. Conservatives are taking aim at programs vital to women and their families — including Social Security, Medicare, Medicaid and other key domestic programs — while proposing trillions of dollars in additional tax cuts for the wealthiest Americans.

What these programs really mean to the individuals and families who rely on them needs to become a bigger part of this debate. The National Women's Law Center put together state-by-state fact sheets providing detailed information on the impact that Social Security has for women and their families in each state including statistics on the number and types of Social Security beneficiaries, average benefits, and the number of people lifted out of poverty by Social Security benefits.

[Download the Alaska state fact sheet for state-specific information.]