Alaska Public Pension Coalition

Actuary Support for Traditional Pension Plan

The push for returning to a traditional pension plan continues in Alaska. A hearing regarding Senator Dennis Egan's Senate bill 121, which would allow public employees to return to a defined-benefit plan, took place on Thursday, September 15th. Those in favor of bill 121 still face strong opposition from the Parnell administration. A consulting actuary was brought into strengthen the argument for the bill. Flick Fornia, the actuary, testified that the change back to a defined-benefit plan would be no more costly than the current plan and would end up providing a more secure retirement for many workers.

To read a full news report from the Juneau Empire, click here.

(Full news article by Pat Forgey of the Juneau Empire, article appeared on September 16th, 2011)

Center for Economic and Policy Research - Pension Return Calculator

“Most pension funds assume a 10 percent rate of return, the historical average,” said Dean Baker, a co-director of Center for Economic and Policy Research (CEPR). “There are practically no plausible scenarios in which stocks will only produce a 4.5 percent rate of return, especially when one considers our current low price-to-earnings ratios.”

“The Pension Return Calculator” allows users to manipulate several variables --including nominal rates of return on stocks and GDP growth-- to show price-to-earnings ratios from 1962-2050 in an attempt to achieve a risk-free, 4.5 percent rate of return.

The calculator demonstrates that attempts to scale back public pensions based on pessimistic expectations of rates of return are misguided. Barring another downturn of the magnitude of the Great Recession, it is highly unlikely that the rate of returns on public pensions will not be near the historic average.

[Excerpted from the Center for Economic and Policy Research. Access CEPR's Pension Return Calculator here.]

Wisconsin Retirees Stand Up for Public Employee Rights, Reject Gov. Walker’s Proposal

The Wisconsin Alliance, which represents over 100,000 retirees, joined tens of thousands of workers, students and Wisconsin residents in protests, sit-ins, and rallies - both at the Madison capitol and statewide - to protect their rights, benefits and working conditions this week.

Under Governor Scott Walker’s (R) plan, state employees’ share of pension and health care costs would go up by an average of 8% (Appleton Post Crescent). Among those speaking out to protect their collective bargaining rights were retired teachers and public employees, who are well-aware that Walker’s budget bill would remove what they have earned over several decades. Wisconsin Alliance President Leon Burzynski said in a statement Wednesday, “Since the 1930’s, Wisconsin has had a great tradition of allowing public sector workers a voice on the job. Now, the Governor wants to take away that right abruptly…some politicians, including the Governor, are using their political power to take away workers’ rights and force cuts that will devastate Wisconsin’s weakened economy.”

[Directly excerpted from the Alliance for Retired Americans on February 23, 2011. Click to read the Friday Alert Newletter.]

 

How much you will - or won't - collect from Social Security

Center for Economic and Policy Research - Social Security Benefit Calculator

If you are among the optimists who believe that Social Security will still be around when you retire, you likely want to get a sense of how much money you’ll be able to count on in your golden years.

And if you’re among the more pessimistic types – and who wouldn’t be after new congressional projections showing the fund will be drained by about 2037 - you may still want to know how much you’re missing out on.

The Center for Economic and Policy Research has created a handy calculator to do just that.

Paying for Retirement is Now Your Problem

The Great Risk Shift: Your Retirement is Now Your Problem

You’ve heard of the Social Security crisis. And you’ve probably heard that the pensions promised to state employees are terribly underfunded. And maybe you’ve even heard that most Americans don’t have enough money in their 401(k)s.

Too often, these are three separate conversations. They shouldn’t be. We don’t just have a Social Security problem or a 401(k) problem. We have a retirement-security problem. And when we look at one or another piece in isolation—as most of the deficit-reduction proposals do—we run the risk of making it much worse. To be more specific, we run the risk of continuing the great risk shift of the last decades of the 20th century, in which uncertainty that was once borne by employers and the government has increasingly been shunted onto individuals.

The full article is available on Newsweek

Baby Boomers Near 65 With Retirements in Jeopardy

CHICAGO (AP) — Through a combination of procrastination and bad timing, many baby boomers are facing a personal finance disaster just as they're hoping to retire. Starting in January, more than 10,000 baby boomers a day will turn 65, a pattern that will continue for the next 19 years.

The boomers, who in their youth revolutionized everything from music to race relations, are set to redefine retirement. But a generation that made its mark in the tumultuous 1960s now faces a crisis as it hits its own mid-60s.

"The situation is extremely serious because baby boomers have not saved very effectively for retirement and are still retiring too early," says Olivia Mitchell, director of the Boettner Center for Pensions and Retirement Research at the University of Pennsylvania.

There are several reasons to be concerned:

For additional information see the full report on The New York Times website.

Retirement Resolutions for 2011

Retirement Resolutions for 2011: Beefing Up That Three-Legged Stool

With the New Year right around the corner, hopefully many Americans are breathing a little bit easier. The economy is beginning to rebound, even if the unemployment rate remains high and housing prices remain stagnant.

But even should we see strong economic growth in the coming year, challenges remain in terms of Americans' retirement security. The "retirement income deficit"--the gap in the amount of money that Americans aged 32-64 have for retirement today and what they should have today in order to maintain their standard of living in retirement--was recently calculated to be an astounding $6.6 trillion nationwide, or about $90,000 for every American household.  

With that in mind, there are a few simple steps Americans can take right now to ensure their retirement planning is on the strongest footing possible for 2011.

Alabama Town Refuses to Pay Defined Benefits to 150 City Retirees Despite a State Law

Alabama Town's Failed Pension is a Warning

The struggling small city, Prichard, Alabama, on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.

Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.

For additional information see the full report on The New York Times website.

Alaska’s retirement system comes under fire

Chris Freiberg reports on Fairbank’s teachers struggling to cope with the new retirement system.  For the full story, click here.

 

Retire the change. Teachers, public employees lobby for return of pensions

Soldotna reporter Jenny Neyman chronicles two new teachers in the Kenai Penninsula Borough School District possibly leaving the jobs they love due to changes in the state retirement system.  Neyman covers the recent retirement security forum held at Soldotna High Scool.  For the full story, click here.