Panel Tells Congress: Public Pension Plans Getting It Right

The committee heard testimony that pensions are fundamental to ensuring retirement security for American workers. But, less understood is the critical role pension funds play in stimulating the U.S. economy and providing long-term investment capital for businesses, technology and medical advancements.

NLC, along with 19 other national organizations representing state and local governments and officials, public employee unions, public retirement systems, and more than 20 million state and local government employees, retirees and their beneficiaries, submitted a letter for the record to the JEC. The letter provides key facts on the benefits and strengths of the nation’s state and local retirement system. Signatories also commend the JEC for examining the need to strengthen retirement security and economic growth in the United States. The full letter is available on NLC's website. 

The hearing entitled, “Your Money, Your Future: Public Pension Plans and the Need to Strengthen Retirement Security and Economic Growth” was convened by Sen. Robert P. Casey Jr. (D-Pa.). 

At the hearing, Rep. Earl Pomeroy, (D-N.D.), declared it “a good day” for pensions on two fronts. The first piece of good news, he said, was that Sen. Casey had convened the hearing to examine the economic and retirement security benefits of pensions. Second, the House of Representatives passed important technical corrections to the Pension Protection Act of 2006.  

The three-hour hearing garnered attention from key lawmakers, including JEC Chair Sen. Chuck Schumer, (D-N.Y.). “Sen. Casey is right to point out that strong public pension plans benefit more than just the workers they are designed to serve,” he said. 

Schumer also noted that “these plans help fuel the economy by driving investment to venture capital funds that play a critical role in nurturing American innovation and breakthroughs across the technological spectrum — including life saving advances in health care. So, it is critical that we in Congress do all we can to ensure that public defined benefit pension plans are protected.”

In his opening remarks, Casey highlighted the role of pensions in providing retirement security, recruiting workers, stimulating the economy and providing investment capital. He also stated his concerns that “moving billions of dollars of retirement assets from defined benefit plans to defined contribution plans adds substantially to the risk we are asking ordinary Americans to take."

As reported in Pensions and Investments, Casey also remarked that, “At a minimum, we should ensure that the circumstances that led to the decline of defined benefit plans in the corporate world are not repeated in the public or Taft-Hartley sectors.”

Also in attendance were Sen. Amy Klobuchar (D-Minn.) and Reps. Kevin Brady (R-Texas) and Elijah Cummings (D-Md.). Committee members probed a wide range of issues related to pensions, and remarked that economic security issues are top-of-mind for their constituents.  

Testifying at the hearing were: Sherrill Neff, partner, Quaker BioVenture; Christian Weller, associate professor at the University of Massachusetts and senior fellow at the Center for American Progress; Will Pryor, a firefighter and chair of the Los Angeles County Employees Retirement Association; and Barbara Bovjberg, director, education, workforce and income security with the Government Accountability Office.

At the conclusion of the three-hour long session, Casey asked the panelists for their recommendations on what Congress can do with respect to pensions. The panelists agreed that public pensions do not require new federal attention, but that work is needed to restore retirement security for private sector workers and to address the national health care crisis.