There is no one-size-fits-all solution for every challenge to retirement security. Some states are already working on expanding paths to retirement security for all private sector workers, others are lagging behind. Some states have strong public sector benefit design, but poor funding policies for promised pensions. Some retirement systems have very near-term solvency issues, while others are in a position where if they make improvements now they can avoid costly fixes down the road. We believe that solutions start with a data-first analysis of the challenges unique to a state, municipality, and system. And that they are best moved forward with a collaborative process.
Technical expertise should be paired with a collaborative process.
Equable teams up with individuals and organizations who believe in collaborative problem solving where all affected stakeholders are participants in the policy change process. Lasting change typically is produced through an inclusive process that values the voice of employees (including traditional labor leadership and public worker associations) as well as employers (such as agency heads, superintendents, fire department chiefs, police commissioners, etc.).
There are many paths to build sustainable, affordable retirement systems for all.
There is no uniform style of retirement plan that fits every kind of public or private sector worker:
- There are good ways and bad ways to design final income pension plans.
- There are good ways and bad ways to design guaranteed return pension plans.
- There are good ways and bad ways to design defined contribution plans.
- There are good ways and bad ways to design money purchase, hybrid, or any other kind of retirement plan.
- And there is no binary choice of just one way or the other.
If an employer is going to offer a retirement benefit the key criteria that matter most are: it is designed to put employees on a path to retirement income security, the goals of offering the benefit are clearly stated, the benefits are affordable, and the funding policy is sustainable.
Elements of all good “pension reform”
- Any effort to improve an existing retirement system should ensure the state or local government can keep the promises that it has made to its retirees and current employees.
- A foundational principle for offering a retirement benefit should be that everyone participating in the retirement system actually has a path to retirement income security. What that looks like will vary from state to state, and for different kinds of jobs.
- Improving the sustainability of a pension plan requires reducing financial risks, improving budgetary certainty, and getting debt paid off as quickly as possible. The details for how to accomplish this will vary considerably from place to place — but the outcome should be the same.