Study Finds Traditional Pension More Cost Effective for States and Workers
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A new study finds that defined-benefit pension plans are not only preferred by state employees, but more cost efficient for state governments than defined-contribution plans like 401(k)s.
The report, “Decisions, Decisions: Retirement Plan Choices for Public Employees and Employers“ by the National Institute on Retirement Security (NIRS), studied seven states that offer both defined-benefit and defined-contribution plans to workers. It also looked at two states, Nebraska and West Virginia, that switched from defined-benefit plans to defined-contribution for new employees–only to switch back to traditional pensions because they were more cost efficient for the state and the workers.
Ilana Boivie, one of the study’s authors says:
Employers understand that pensions remain the most cost-effective way to fund a retirement benefit, and that switching from pensions to individual accounts can drive up costs for taxpayers. These economic facts coupled with strong employee preferences for pensions suggest that public employers are unlikely to mimic the trend away from pensions that has occurred in the private sector.
Click here for the full report.
Stories from the Kitchen Table: America’s Middle Class Is Struggling
When revenue problems forced the Central Community Schools in DeWitt, Iowa, to cut back on expenses, Amanda Greubel and her husband, Josh, who both work at the schools, kept their jobs but lost $10,000 a year in income. With a five-year-old and another child due in December, a mortgage and student loans to pay, their life has changed dramatically.
Greubel, director of the Family Resource Center for Central Community Schools, told a Senate Health, Education, Labor and Pensions Committee hearing today what life is like in the day-to-day world of middle-class Americans struggling in this economy. The hearing was aptly titled, Stories from the Kitchen Table: How Middle Class Families Are Struggling to Make Ends Meet. Said Greubel:
Sometimes the grocery money runs out before payday, and then we have to be creative with what we have in the cupboards until we get paid again. My son ends up eating more cold cereal at dinnertime than I care to admit.
It means that most of our clothing now comes from Goodwill, garage sales, or clearance racks. This past spring our son was hospitalized for three days, resulting in $1,000 in out-of-pocket medical expenses. This month a problem with our roof required $1,500 in repairs. Even though we’d been setting aside a little money each month for medical expenses and home repairs, we weren’t prepared enough and have spent the last few months catching up.
Social Security Cuts Put Vets Back in Line of Fire
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Social Security is crucial to veterans and military families when those who have served our country retire, become disabled, or lose their lives. Yet Republican lawmakers have put Social Security in their sights, willing to trade Social Security cuts for tax breaks for the wealthy and corporations in the name of deficit reduction. But cuts to Social Security or privatization would hurt millions veterans and military families.
Today, nine veterans’ organizations—including the AFL-CIO Union Veterans Council—and several lawmakers joined the Strengthen Social Security campaign and released a report “Social Security: Serving Those Who Serve Our Nation” that shows the deep harm cuts would do to veterans and military families. For example:
Most of the more than 4,000 children who lost a parent since the beginning of the Iraq and Afghanistan wars now receive Social Security survivors’ benefits. More than 771,000 veterans receive Social Security disability benefits. Social Security currently pays benefits to over 9 million veterans—about 4 in 10 veterans today—and the vast majority of veterans will become Social Security beneficiaries in the future.
Women’s Law Center Provides State-by-State Look at Social Security and Women
In the upcoming budget debate, congressional Republicans have said they are more than willing to trade off huge cuts to programs that are vital to working families—especially to women and children—such as Social Security, Medicare, Medicaid and other key family helping programs in exchange for tax breaks for corporations and the wealthy.
One of their biggest targets is Social Security. The National Women’s Law Center (NWLC) now has put together new fact sheets about the impact of Social Security on women and their families in all 50 states.
The fact sheets paint a picture of just how essential Social Security is for women and their families, including how many women and children receive Social Security in each state, average benefits for women and men, and Social Security’s role in lifting residents out of poverty
In Ohio, home to House Speaker John Boehner (R) who wants to raise the retirement age, 91 percent of residents who are 65—the current retirement age—receive Social Security benefits, and the majority are women. Nearly 160,000 Ohio children receive Social Security benefits because of the loss of a parent’s income due to death, disability or retirement. Read the rest of this entry »
Tell Lawmakers, ‘Don’t Make Us Work ‘Til We Die’
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There is a scary scenario in store if the Republican budget, drafted by Rep. Paul Ryan, is ever implemented. Take a look at this new video from Strengthen Social Security, Don’t Cut It, that takes us to a new dimension where “politicians are cutting our Social Security and Medicare and forcing us work until we die.”
The Serlingesque video is part of a new campaign to fight back against the Republican budget and other proposals to raise the retirement age, turn Medicare over to Big Insurance and slash Medicaid for seniors, children and people with disabilities.
Next week on April 27 and 28 in more than 50 cities in 18 states, activists from the Strengthen Social Security, Don’t Cut It coalition—the AFL-CIO and the Alliance for Retired Americans are part of the coalition—will hold events at congressional district offices to tell their lawmakers hands off Social Security. Visit the Alliance here and the Strengthen Social Security coalition here to find an event near you.
If you can’t make to a rally or there isn’t one in your area, you join a virtual rally here.
Tell Your Senators to Support the Social Security Protection Amendment
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Next Wednesday, March 29, you can take action to strengthen Social Security by calling your U.S. Senators and urging them to support the Social Security Protection Amendment.
The amendment is part of a small business bill (S. 493) and it’s language is straightforward. It says:
Social Security benefits for current and future beneficiaries should not be cut and Social Security should not be privatized as part of any legislation to reduce the Federal deficit.
Congressional Republicans led by Senate minority leader Mitch McConnell (R-Ky.) and House Speaker John Boehner (R-Ohio) are demanding Social Security cuts as part of any deficit reduction legislation, even though Social Security has not contributed a penny to the deficit and has a $2.6 trillion surplus today. Read the rest of this entry »
Maryland Workers Blast Cuts to Education, Health and Retirement
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Some 15,000 Maryland teachers, government workers and other public employees rallied and marched in Annapolis last night to protect public school funding and workers’ health and retirement security. Bills before the state legislature call for big cutbacks in all three.
Before marching to the State House, AFL-CIO President Richard Trumka told the crowd that rallied at Navy-Marine Corps Stadium:
We keep hearing from politicians that they’ve got to cut, cut, and cut. I want to ask you something, where did they ever get the nonsensical idea that you can cut our way out of the hole they put us in?
Destroying economic security and our fragile economic recovery is bad policy and is just plain wrong. Scapegoating teachers and other public workers is bad policy and it is flat ass wrong. Jeopardizing our children and America’s future by hacking up public education is bad policy and it is just wrong and it won’t go on in the state of Maryland.
Here’s more on the rally from Union City’s Chris Garlock:
Terry Jefferson, a 20-year special education teacher and member of AFSCME Maryland, which spearheaded the event with the Maryland State Education Association, said, “The way things are going; I don’t even know what my future looks like.”
New Social Security Calculator Helps Set Retirement Income Goals
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In his State of the Union address, President Obama insisted on the need to protect Social Security and ensure that future generations can depend on it, and he urged bipartisanship in strengthening Social Security, “without slashing benefits” or privatization.
The Center for Economic and Policy Research (CEPR) has made it easy to determine how much of your retirement income will come from Social Security. The CEPR’s new Social Security Calculator also enables you to compare your Social Security retirement income with other households with similar demographics.
The calculator lets users enter their planned date of retirement, current income, estimated mortgage debt, savings and stocks and pension to calculate their future household retirement income. Users also can enter demographic information such as age, race and marital status and compare their total retirement income to similar households in their area. The data used in the calculator is drawn from the U.S. Census Bureau’s American Community Survey (ACS).
Deliberate Distortions Create False Sense of Urgency for Social Security Cuts
There is so much inaccurate information—much of it deliberately cultivated—about the solvency of Social Security, that it’s leading policymakers, analysts and lawmakers to believe there is an urgent need to make major changes to Social Security.
Add to that a cadre of newly elected representatives and senators who back raising the retirement age, privatizing Social Security or making other cuts to the nation’s most successful social safety net program, and it becomes even more important to make sure the real picture of Social Security’s future is not distorted.
A new issue brief from the Center for Economic and Policy Research (CEPR) calls attention to the fact that Social Security will be fully solvent for the next 27 years and any premature action to make changes to the program will have a severe impact on millions of near retirees. Says CEPR Co-Director Dean Baker:
Misinformation about Social Security has led many to believe that Social Security is in immediate danger of insolvency but the program will be fully solvent for almost three more decades. Furthermore, even if no changes are ever made, a child born in 2010 can expect to see a benefit that is more than 50 percent larger in real terms than what current retirees receive today.
Dems Urge McConnell, Republicans to Take Social Security High Road
When Democratic congressional leaders introduce emergency relief legislation for a $250 supplemental Social Security payment, they will offer Republicans—who have blocked emergency help in the past—a chance to take the high road. The supplement would help recipients who are not getting a cost of living adjustment for the second straight year.
In a letter, Senate Republican Minority Leader Mitch McConnell (Ky.) and 20 senators, including Majority Leader Harry Reid (D-Nev.), say:
We hope that you will agree with us that it is far more important to provide $250 in emergency relief to senior citizens and disabled veterans than it is to provide an average tax break of over $100,000 a year to taxpayers earning more than $1 million a year.
The emergency benefit would go to 50 million seniors and people with disabilities.
The letter notes that when Congress returns to action after the November elections, it also will debate an extension of the Bush-era tax cuts for the wealthy and
