Four years ago, the Alaska Legislature dismantled the public employee retirement system. Overnight, Alaska went from having one of the best retirement systems in the country to having the absolute worst.
Under the current system, most newly hired public employees will only have a risky stock market account when they retire — and no affordable health care.
Alaskans who make it to age 65 often have to prepare financially for a long time in retirement. Twenty-nine percent of women who reach age 65 will also reach 90. Eighteen percent of men who reach 65 will make it to 90.
Retirees who only have defined contribution plans could outlive their contributions.
It is true that many private companies have switched from defined benefit to defined contribution pension plans in recent years. But every employee of a private company participates in Social Security which is, by design, a form of defined benefit pension.
Alaska’s teachers, municipal employees, and state employees, however, do not have Social Security. You cannot outlive Social Security. You can, and many older Alaskans will, outlive the new defined contribution plan for our municipal and state employees and teachers.
What will Alaska do with retired teachers and police officers who outlive their contributions and have no other pension or Social Security?
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