About a year ago, I had a conversation with some of my friends about what I do for a living. When I told them I work for a public pension plan, their reaction was not quite what I expected. They began telling me pension plans are old fashioned and the best type of retirement plan was the 401(k). They all work in private industry and are seeing fewer private employers provide pension plans. So, their assumption is, of course, the 401(k) is better.
Let’s think about these two words for a moment…”covet” (to yearn to possess or have something) vs. “begrudge” (to envy or resent the good fortune of someone, to be unhappy or upset because someone has something you think they do not deserve).
Since the Great Recession in 2008, warnings of an impending pension crisis have been splashed across the business pages of newspapers across the country. Despite these boisterous decrees, America’s public pension funds are stable. We explore the roots behind the false pension crisis narrative and examine the facts.
Reform has been the hot topic in the world of public employee retirement plans for years. Too often the conversation immediately turns to tossing out defined benefit pensions for government workers and replacing them with individual investment accounts like 401(k)s. Supporters of the 401(k) approach say these plans are a better fit for the modern worker; they are always fully funded; they give workers control over their own money; the public sector should follow the private sector's lead in eliminating pension plans. However, this thinking does not consider the uniqueness of public sector jobs, workers' lack of understanding of financial products, the impact on workers' retirement security, or the effect on the employer and taxpayers.
A utility worker from Rolla Municipal Utilities (above) clears debris.
Governments face many tough decisions when determining how to make the best use of taxpayer dollars. Citizens demand a certain level of service from public entities for protection, infrastructure, health, education, and more. Of course, in order to provide these services, governments need to be able to attract and retain qualified workers. The better the public workers you have working in your community, the better services you will enjoy as a taxpayer.
The day before the 2016 firearms season at my deer camp in Cole County, MO.
Deer camp is a Missouri tradition that is ages old. I have been hunting and hanging out at deer camps since I was a kid, and if there is one thing I have learned over the years (other than becoming pretty good at frying catfish) is that this that this setting is perfect for lively and opinionated conversation.
Above: 2016 annual benefits paid to LAGERS' benefit recipients in Missouri.
Employee benefits are often thought to be for the betterment of one and only one group - the employees. Rather than simply providing a salary, employers use benefits like health insurance, retirement plans, and paid vacation to build morale, keep good workers, and to attract new workers. For these reasons, it makes sense to think that compensation other than salary are good for the employees and only the employees. But there is more to it than that.
A publicly-held company must make decisions that will positively affect the bottom line so the shareholders may profit. Likewise, government leaders serve the taxpayers and make decisions to enhance the prosperity of their communities. Decisions about employee benefits, therefore, cannot only be valuable to the employee, but also must make sense for the shareholder or taxpayer. In other words, all stakeholders must get some return on the investment for employee benefits.
Since the Great Recession in 2008, warnings of an impending pension crisis have been splashed across the business pages of newspapers across the country. Despite these boisterous decrees, America's public pension funds are stable. We explore the roots behind the false pension crisis narrative and examine the facts.
I rarely take vacations and when I do, I like to completely unplug, escape and get back to the quiet of the country. With my regular work being about retirement issues, employer contribution rates or budgets seemingly all day long, when I get away I want to just enjoy the quiet calm of ‘non-work’.