In honor of America Saves Week we held another Facebook Live event this past Monday. Jeff Pabst, LAGERS' Education and Outreach Coordinator, discussed the value of LAGERS benefits in our latest installment.
A new study by the National Institute on Retirement Security (NIRS) shows that income retirees receive from public pension plans, like LAGERS, produce positive economic impacts across the nation. The study, using 2016 data, reports public pensions are responsible for $1.2 trillion in total economic output in the U.S. and added $202.6 billion in government revenue from retiree income taxes and spending.
The recently released 2018 Economic Impact Report from Missouri LAGERS shows the pension fund paid $308 million to retired local government workers and their loved ones last year with ninety-three cents of every dollar ($286 million) staying in Missouri.
A recent article in Forbes, Workplace Retirement Coverage Drops And The System Continues To Fail, by Teresa Ghilarducci, provides some sobering statistics about retirement preparedness for Americans. It is no surprise Americans who have access to a retirement plan at work will be better prepared for retirement than those without a plan. However, according to Ghilarducci, only 40% of workers in the U.S. are covered by a retirement offered by their employer. This is a 4% decrease since 2014 and this number has declined in 14 of the 17 years since 2000.
We spend a lot of time talking about the savings crisis in the United States. We’ve written about the unfunded liabilities in 401(k) plans, we’ve written about the lack of financial literacy, and the dangerously low retirement account balances across the country. And while all of this might lead to the conclusions that having a defined benefit plan, like LAGERS, is an important cornerstone to retirement security in America, pension reform debates still often favor the significant reduction or elimination of defined benefit plans altogether.
In 2013, the City of Webster Groves joined the Missouri Local Government Employees Retirement System (LAGERS), a statewide public defined benefit retirement plan covering local government workers from all across Missouri. This is our story of why and how we made this giant leap forward in providing retirement benefits to our employees, and, we believe, in ultimately enhancing service to our citizens.
LAGERS retirees contribute to the economies of cities and counties all across our great state. Just take a look at this snapshot of the economic impact created by the retirees of Northwest Missouri. In 2017, over $15 million was paid to our retirees, who then in turn spent money in our communities with their LAGERS benefits.
Jackie Barnett, PHR, SHRM-CP is a long-term public employee at the City of Columbia, MO. She has completed 23 years of service and is the HR Manager responsible for payroll support and benefits for over 2000 employees. The City of Columbia has recently engaged LAGERS to do on-site meetings for its employees in order to better inform them on the value of a LAGERS pension. Since pensions are a great tool to attract, but also retain quality employees, the City wants to educate its employees on LAGERS in order to increase retention among City employees. This is her account of their experience.