DiNapoli offers vigorous argument on benefit of strong pensions New Yorkers concerned about economic insecurity New York State Comptroller Tom DiNapoli made a strong defense of defined pension benefit plans as good for the economy during a recent program presented by City & State magazine and the American Association of Retired People (AARP) to release a new report, State of the 50+ in New York State. The report reflects many of the issues CSEA has long raised regarding economic insecurity and the squeeze on working families, but also has some fresh insights. DiNapoli was the keynote speaker at the event releasing the findings. More than three-quarters of New York voters over age 50 favor establishing some kind of state-run retirement program to help New Yorkers who currently do not have access to retirement savings. Too many people fail to recognize the importance and benefit of strong retirement benefits for the state’s economic well-being. DiNapoli noted that more than 80 percent of public employee retirees continue to live, spend and contribute in New York state. Americans are getting older faster than at any time in history, especially in New York, and that means defined benefit pension plans are more important than ever to New York’s economy. “Among housing costs, taxes and tuition payments, New York’s families have enough financial uncertainty to deal with. Fortunately, the pension fund is strong and our state and municipal workers don’t have to worry about whether their pension check is secure,” said state Comptroller Thomas DiNapoli, who oversees the state’s pension fund. “In June, the pension fund reached an State Comptroller Thomas DiNapoli, right, speaks at a news conference before the Rochester Labor Parade. From left are Western Region activist Tim Finnegan and Western Region President Flo Tripi. DiNapoli’s recent address to the American Association of Retired People emphasized the need for secure retirement plans, especially pensions. estimated $180.7 billion, a record value. We’re 92 percent funded and, thanks to a dedicated investment staff, we’ve come out of the Great Recession as one of the best funded and strongest performing pension funds in the country,” DiNapoli said. In New York, 26 percent of all voters over age 50 have no option to save for their retirement through their employer. Another 22 percent have only a defined contribution plan, such as a 401(k), where there is no assurance on the amount the retiree will receive. Only 15 percent of that group is covered by a defined benefit plan, such as the state’s pension fund. “Despite the strength of the New York State Retirement System’s defined benefit plan, misguided critics suggest we switch to a 401(k)-type defined contribution plan. The fact is 401(k)s were created about 30 years ago to supplement retirement with added savings, not replace pensions. They have proven woefully inadequate for the men and women who rely on them for their primary retirement income. During the financial crisis, 401(k)s lost $1 trillion,” DiNapoli said. “Defined benefit plans also typically cost less. 401(k)s charge higher fees and often get lower returns on investment,” he said. Retirement security for working New Yorkers also provides the state with muchneeded revenue in the form of taxes and purchasing power that would otherwise be unavailable in more risky retirement schemes. Read the full report at: http://www.aarp.org/ politics-society/advocacy/info-2014/new-yorkstate fifty-plus.html New Yorkers’ concerns: • better street maintenance; • more affordable housing; • more employer support and flexibility for workers who are caregivers to a family member; and, • a public advocate to protect consumers from energy price spikes. October 2014 The Work Force 3
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