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Why Pensions Matter
Source: National Public Pension Coalition

Pensions, in the broadest sense of the term, have existed since ancient Rome. Soldiers in the
Roman army could earn pensions through their military service. The value of these pensions to Roman
soldiers helped to maintain the power of emperors such as Augustus. Pensions for military service have
continued to exist in one form or another in the two thousand years since.

Public pensions for teachers, firefighters, police officers, and other civilian public servants in the United
States are a more recent development. In fact, public pensions as we know them are just over one
hundred years old. Governments began offering pensions because they are the most effective and cost efficient
way for working families to prepare for retirement. Unfortunately, many people today have
forgotten the true value of pensions and why they are so important. This report will explore the history
of defined benefit public pensions in the United States, why they were implemented in the first place,
and why they continue to remain today.

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401(k) Lawsuits: What Are the Causes and Consequences?
Source: Center for Retirement Research

The brief’s key findings are:

  • Employers with 401(k)s are required to administer their plans for the “sole benefit” of workers, a standard that has been the subject of substantial litigation.
  • Recent lawsuits have focused on excessive fees, although inappropriate investment options and self-dealing are other common reasons for suits.
  • Court rulings in these cases often hinge on whether plan fiduciaries follow a “prudent” decisionmaking process, rather than on specific outcomes.
  • Perhaps in part to avoid such litigation, 401(k) sponsors have begun to rely more on low-cost index funds and have taken steps to reduce fees.
  • At the same time, concerns about litigation could dissuade 401(k) sponsors from offering potentially useful innovations, such as lifetime income options.

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Study: Police Officers & Firefighters Are More Likely to Die by Suicide than in Line of Duty
Source: Ruderman Family Foundation

 

A white paper commissioned by the Foundation has revealed that first responders (policemen and firefighters) are more likely to die by suicide than in the line of duty. In 2017, there were at least 103 firefighter suicides and 140 police officer suicides. In contrast, 93 firefighters and 129 police officers died in the line of duty. Suicide is a result of mental illness, including depression and PTSD, which stems from constant exposure to death and destruction.

 

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Modernizing Social Security: An Overview
Source: Center for Retirement Research

The brief’s key findings are:

  • Many policy experts support targeted changes to Social Security benefits for vulnerable groups, such as caregivers, widows, the very old, and low earners
  • Several of these changes have been endorsed by bipartisan groups, which indicates the potential for widespread support.
  • Such changes, by themselves, would raise Social Security’s long-term deficit.
  • But if the cost increases were offset by reducing other benefits, Social Security could be modernized in a way that is both effective and cost-neutral.
  • Further briefs in this series will evaluate the policy options for specific groups in more detail, including potential offsets to cover the costs.
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An Analysis of Retirement Models to Improve Portability and Coverage
Source: Center for Retirement Research

To better understand the challenges of the 401(k) system and its coverage and to assess possible strategies to improve it, this report presents a three-part analysis. The first part focuses on 401(k)s and documents the extent and nature of portability, the flow of money to IRAs, and leakage from both systems. It summarizes resulting problems and potential solutions. But beyond the existing 401(k) system, a coverage gap remains. So, the second part of the analysis identifies the nature of the coverage gap among wage and salary employees and assesses proposed solutions. But these solutions would not affect the 16 percent of workers in non-standard employment. Therefore, the third part of the analysis looks at options for covering these workers.

The objective of this report is to assess and present a wide – though not comprehensive – range of available options by examining and summarizing existing proposals and, where relevant, examples from other countries.

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Illinois State Retirement Systems Financial Condition as of June 30, 2017
Source: CGFA

This report examines the financial status of the five State-funded retirement systems.

The following is a summary of the findings:
• Public Act 88-0593 requires the State to make contributions to the State retirement systems such that the total assets of the systems will equal 90% of their total actuarial liabilities by Fiscal Year 2045. The contributions are required to be made at a level percent of payroll in Fiscal Years 2011 through 2045, following a phase-in period that began in Fiscal Year 1996.
• From FY 2003 through FY 2017, the combined unfunded liabilities of the systems increased by $86.0 billion based upon the market value of assets. The main factors for this increase in unfunded liabilities were actuarially insufficient employer contributions, changes in actuarial assumptions and demographics and other miscellaneous actuarial factors, along with lower-than-assumed investment returns over 5 years.
• The discussion of the financial condition of the State retirement systems centers on the funded ratio, or net assets divided by accrued liabilities. A system with a 100% funded ratio is fully funded because its assets are sufficient to pay all benefits earned by employees. Based upon the market value of assets, the funded ratio of the State retirement systems combined was 39.8% as of June 30, 2017.
• Projections of the future financial condition of the State retirement systems provide…….

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How Have Pension Cuts Affected Public Sector Competitiveness?
Source: Center for Retirement Research

The brief’s key findings are:

  • To improve the funded status of state and local pensions, many plan sponsors have cut benefits, particularly for new hires.
  • Such cuts, without offsetting increases in wages, could potentially make government employment less attractive to workers.
  • The analysis found that workers joining the public sector after benefit cuts had earned less in the private sector than those hired before the cuts.
  • This result suggests that pension cuts may have hurt governments’ ability to compete with the private sector for workers.

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Dependence on Social Security is Striking
Source: Center for Retirement Research

 

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