NIRS Reponds to The New York Times on Public Pensions
In response to a New York Times article published April 2, 2020, article regarding public pensions, NIRS writes that characterizing these retirement plans that serve 15 million working and 11 million retired employees of state and local government as “time bombs” borders on journalistic malpractice.
Indeed, public pension funds face challenges that will arise because of the unprecedented economic conditions facing all investors. But, the vast majority of these plans are built to last.
The letter indicates that when looking back, the 2008 global market crash reduced public pension fund asset values from $3.15 trillion in 2007 to $2.17 trillion in 2009. But since 2009, nearly every state has enacted meaningful reforms to their pension plans to ensure their long-term sustainability – including benefit reforms and increasing employee contributions. Now, most plans are well-funded and financially stable according to the Boston College Center for Retirement Research. In fact, as of the fourth quarter of 2019, public pension assets were $4.82 trillion, doubling their asset values in less than a decade after surviving the 2008 financial crisis.
Statement on Efforts in Alaska to Restore Pension Benefits to Address Grave Workforce Shortage
Alaska’s effort to restore a pension plan for public workers represents meaningful progress in addressing one of the state’s most pressing challenges: attracting and retaining a stable, experienced public workforce. While Governor Dunleavy has vetoed the legislation, the fact that the measure passed both the House and Senate demonstrates a growing recognition that retirement benefits are not just about retirement security — they also are an essential workforce management tool.
