This paper examines the link between retirement and health by examining whether mortality changes discontinuously at the Social Security eligibility threshold at age 62. It uses data from the National Center for Health Statistics’ Multiple Cause of Death, the Health and Retirement Study, and the Social Security Master Beneficiary Records and Numident Files. Critical components of the analysis include the regression discontinuity framework and the use of detailed objective health outcomes. Key limitations of our estimates are of the effects on mortality net of any anticipatory changes in health investments, the difficulty in knowing whether the results extend to retirement at ages other than 62, and a lack of available data on other objective health outcomes.
2016 Public Pension Funding Study
Source: Milliman White Paper
The Milliman Public Pension Funding Study annually explores the funded status of the 100 largest U.S. public pension plans. The 100 plans in this study reported assets totaling $3.24 trillion on a market basis, up from $3.06 trillion in the 2015 study. Funded ratios dropped by a few points in the 2016 study relative to the 2015 study, largely reflecting the downturn in the equity market in 2014 and 2015. The decline in the median discount rate from 2013 to 2016 provides a clear illustration of what many investment experts are referring to as the current “low return environment.”
Does Public Pension Funding Affect Where People Move?
Source: Center for Retirement Research
The brief’s key findings are:
- Individuals who move generally go to places with the best mix of amenities, including low tax rates and a robust economy.
- An open question is whether a state’s unfunded pension liabilities could also affect moving decisions.
- While movers generally know little about a state’s pension finances, critical news stories could signal poor fiscal management.
- The analysis finds that, in addition to traditional factors, a state’s pension funding does play a role, albeit small.
U.S. Pension Plan Discount Rate Comparison 2009-2014
Source: Society of Actuaries
The SOA is pleased to make available an article comparing the recent historical relationship between pension plan funded status and discount rates used to compute liabilities for funding purposes. The comparison spans years 2009-2014 and covers single employer plans, multiemployer plans, and public plans run by states and large cities.
This article compares the recent historical relationship between pension plan funded status and discount rates used to compute liabilities for funding purposes.1 Comparisons include all three major categories of defined benefit pension plans in the United States: single employer (SE) plans, multiemployer (ME) plans, and state and large city public plans (PP).2.
Cost-of-Living Adjustments
Source: NASRA
Periodic cost-of-living adjustments (COLAs) in some form are provided on most state and local government pensions. The purpose of a COLA is to offset or reduce the effects of inflation on retirement income. Considerable variation exists in the way COLAs are designed, and in many cases they are determined or affected by other factors, such as inflation or the financial condition of the plan. COLAs add both value and cost to a pension benefit. Public pension COLAs have received increased attention as many states look to make adjustments to the cost of benefits amid challenging fiscal conditions and the current low-inflationary environment. This brief presents a discussion about the purpose of COLAs, the different types of COLAs provided by government pension plans, and an overview of recent state changes to COLA provisions.
Will Pensions and OPEBS Break State and Local Budgets?
Source: Center for Retirement Research
The costs of state pension plans are much in the news. Generally, people lump together these unfunded liabilities and make alarming claims that all state plans are about to go bankrupt. The evidence, though, suggests otherwise. On the other hand, looking just at pension plans and just at states doesn’t give the full picture of costs facing states and localities.
401 (k)s: America’s Failed Experience
Source: National Public Pension Coalition
Every American deserves to retire with dignity.
However, due to the shift from pensions to 401(k)s, a secure & dignified retirement isn’t a reality for millions of working people.
401(k)s were never designed to be the primary retirement savings tool for working families – learn why in our latest video:
Illinois treasurer’s office reissues consultant search for Secure Choice plan
Source: P&I
Illinois State Treasurer’s Office, Springfield, is searching for an investment and administrative consultant for the Illinois Secure Choice Savings Program, said Greg Rivara, spokesman, in an e-mail.
The Illinois Legislature approved a bill in December 2014 to establish the Illinois Secure Choice Savings Program, an auto-enrollment, payroll-deducted retirement savings account for certain private-sector employees whose employers do not offer retirement plans outside of Social Security.
Illinois’ pension woes are not so bad after all
Source: Crain’s Chicago Business
New Jersey became the state with the worst-funded public pension system in the U.S. in 2015, followed closely by Kentucky and Illinois.
The Garden State had $135.7 billion less than it needs to cover all the benefits that have been promised, a $22.6 billion increase over the prior year, according to data compiled by Bloomberg. Illinois’s unfunded pension liabilities rose to $119.1 billion from $111.5 billion.
The two were among states whose retirement systems slipped further behind as rock-bottom bond yields and lackluster stock-market gains caused investment returns to fall short of targets. The median state pension had 74.5 percent of assets needed to meet promised benefits, down from 75.6 percent the prior year. The decline followed two years of gains. The shortfall for states overall was $1.1 trillion in 2015.
How to Fix a Retirement Plan at a School or Nonprofit
Source: The New York Times
If you work for a school or nonprofit of any sort, there is a decent chance that your workplace retirement savings plan is not as good as it could be — if you are lucky enough to have one at all.
While employees of universities and big hospitals often have reasonably attractive plans, public schoolteachers, charity workers and many employees of religious organizations who examine their retirement accounts frequently find that the investment choices are mediocre and the fees are too high.
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