Governing, August 2008
Reporter Penelope Lemov reports that some state pension plans are doing so well that the private sector could use their advice.
The article explains that states are interested in having its private citizens, as well as its public employees, financially prepared for retirement. Those who aren’t prepared are likely to be dependent on the state for assistance.
NIRS Executive Director Beth Almeida tells Governing, “When you look across the economy and at how Americans are preparing for retirement, you see clouds on the horizon and stormy weather moving in.” The ominous signs include the likelihood that Social Security payouts will be lower for future retirees, the reality that private employers are turning away from defined-benefit pension plans, and the fact that the personal savings rate hovers at or below zero. Meanwhile, the store of wealth that many households relied on — their homes — is dwindling in value or being lost.
Although Congress has passed many laws in the past 30 years aimed at improving income security for retirement, those attempts haven’t reached people with limited access to retirement plans at work. “We haven’t been able to move the needle on that 50 percent coverage rate,” Almeida says. That is what the proposals to link public pension expertise with private-employer needs seek to do. Read the full article here.