Pensions for the Future: Anything Less is No Pension Plan at All

Pensions for the Future

Anything Less is No Pension Plan at All

By Jerry Rukavina, MEA-MFT Representative – Great Falls

A couple of weeks ago the financial focus was “America Saves Week”, a time period in which Americans are encouraged to foster good saving habits. The premise is that a healthy savings account means a better lifestyle. This theory is especially important when retirement is considered.

About 49% of Americans don’t have enough saved to cover costs for three short months. Even worse, 28% have no emergency savings at all. Before Americans can bust out the savings accounts and pocket a chunk of their income for the future, we need to make sure the priority is for jobs that pay wages that make saving possible for both day-to-day needs and for a secure retirement.

In the Montana Legislature, there is a struggle brewing over defined-benefit (DB) and defined-contribution (DC) pension plans. DC plans are similar to 401(k) plans where your money is vulnerable to stock market fluctuations. DB plans are federally insured because they adhere to the strictest money-safe standards put forth by federal requirements. By definition, DB plans are by far the most reliable choice.

Secure DB plans are common in some private enterprises, construction, building, and manufacturing industries, and in public employment.

Montana’s dedicated workers, the folks who take care of this state and its people every single day, work hard. As I see it, any pension plan that isn’t structured to guarantee them a solid and reliable return on their retirement contribution so that they can live in retirement dignity, is no pension plan at all. Under the standard guidelines for smart saving the goal is to get the most for your investment in the safest way. There is only one pension that meets these goals – defined benefit plans.

In light of “America Saves Week” I encourage the legislature, and all employers, to follow sound retirement planning principles and do right by Montana by insisting on secure pensions for Montana workers.

Montana State AFL CIO