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Why Millennials should care about retirement security

At 23 years old, only 18 months out of college, and with hefty pile of student debt, you could say I’m living the typical “Millennial” experience. My work is important part of my life, as are my family and social circle. However, recently a new topic has started to brew toward the forefront of many of my thoughts and decisions – retirement security.

It might seem odd for someone my age to be concerned about what happens in the realm of retirement security, but one thing I’ve learned recently is that somehow, everybody has some skin in this game.

Grant Wood Profile

Grant Wood

I learned of my personal tie to the discussion around retirement security, not from my own vested interest in being prepared for life after work, but being prepared now, to protect the retirements of those closest to me.

My grandparents are two retired educators, each with at least 30 years of public service in the field of education. My grandmother ran English immersion programs, both in the classroom and at the district level for 30 years. My grandfather taught many subjects to middle and high school students for almost a decade before moving into administration and becoming a principal for 20 years.

While both of my grandparents maintained different paths and careers in K-12 education here in Phoenix, they did have one major thing in common. Over the course of their respective careers, they each paid into the Arizona State Retirement System for 30 years, securing a defined benefit pension for life.

The Arizona State Retirement System (ASRS), whose members include public school employees, university and community college staff, and other government workers, provides a defined benefit pension plan to its members. Employees pay into the retirement system over the course of their career through payroll deductions that are matched, 50/50, by the employer.

Defined benefit pension plans like ASRS provide a much more secure retirement plan as they don’t rely on the stock market for their success the way defined contribution plans, or 401Ks, do. They are also guaranteed to life, so you won’t outlive your benefit.

My grandparents each receive a modest benefit each month from their pension, and as a grandson, it comforts me that their ASRS benefit will be there for the rest of their lives. Many elderly citizens in this country are sliding into poverty after burning through their retirement savings or 401ks. They are becoming dependent on public assistance programs and their children or grandchildren to pay for such necessities as housing and medicine. Many Americans are now at risk of heading into this retirement crisis. Now Millennials shouldn’t be concerned about moving back in with their parents or grandparents, but them having to move in with you. The livelihoods of those who raised you are literally at stake.

Anybody who dedicates their life to public service and improving the lives of others the way my grandparents have deserves to retire with dignity and security. With their retirement secure, they will continue to add to the local economy and be a benefit to their community instead of a burden to the taxpayers.

Wall Street interests will continue to attack public pensions this coming year as they have been for so many to switch employees out of defined benefit public pension systems and into defined contribution 401Ks, where they make the money.

Attempts like this, and similar to Proposition 487 in 2014, to switch new or current employees into defined contribution systems and out of stable defined benefit systems like ASRS threaten secure systems and can cost taxpayers millions. I won’t let this happen to my family and will stand to protect ASRS and public pensions in my state. Will you?

Grant Wood lives in Phoenix.


  1. Grant,

    Good thoughts. But with an overwhelming number of Tea Party legislators and a governor who is on a mission to dismantle government programs and hand over the keys to private industry, you and other ASRS members will be fighting an uphill battle.

    While ASRS has been well managed, the Public Safety pension has not, and it will be used as an example of why defined benefit retirement systems are bad policy. In addition, state workers are also at a disadvantage because the Legislature and Governor Brewer threw out the merit system to take away any protections that state workers had to influence public policy. With “at will” status hanging over their head, how many state workers will be wiling to rally to stop legislation meant to weaken the retirement system and push private sector 401-k plans.

    Like education funding, the Legislature and governor will not be willing to adequately fund the pension system to offset retirement money shifted to 401-k plans. Once initial legislation is passed to give existing employees “incentives” to chose to move to a 401-k plan and force new employees into one, it will be difficult to stop the momentum of “privatizing” pensions. The ASU president also wants to force new employees to join a defined contribution plan in order to use money for other priorities.

    Let’s hope teachers can still muster their power to fight the defined contribution legislation, but it will be difficult with this Legislature and governor hell bent on enacting more tax cuts and credits for corporations and higher income individuals who don’t need or necessarily want them.

  2. And us Public Safety Employees Will be there with all side by side continuing The Fight. Great article Grant, Thank You!

  3. I know this is a response to a 6 month old thread, but I just came across it today.
    First I’d like to say that changes to retirement plans are not pushed by Conservatives or Republicans. It is a trend that most companies are making. Why? Because defined benefit programs were originally established to compete with ‘Cadillac Union’ programs. Starting in early 90’s many large companies realized the defined retirement programs were resulting in dramatically increasing long-term liabilities on their balance sheet. In addition, democrat leadership were developing more rules and regulations regarding these plans that would further negatively impact corporations balance sheet. Several corporations decided to convert their defined benefit retirement programs to defined contribution (401K) programs. Simply put, defined contribution provides the employee with control over their retirement and the corporation avoids the continuing growth of the long-term liability. Having a 401K retirement account doesn’t mean retirement funds have to be at risk. There are many ways these funds can be protected and the individual can, if they want, balance their retirement account investment.
    Finally, most states have union contracts that force them to maintain the defined benefit programs. Many states are near financial default because they don’t have the reserves to cover these huge union retirement programs. Something to also consider is the changes that were made to the defined benefit program when the NAFTA free trade was signed by Clinton in 1995. Although these changes have noting directly to do with NAFTA, the democrats slipped in these changes because they wanted to limit how much an employees can accumulate and receive as a lifetime pension. Simply put, how much can be contributed to employees and how much can converted to a lifetime annuity. Keep in mind that these changes do not apply to Congress, Senate or US Supreme Court… just as Obamacare doesn’t apply to them. Highly unionized European countries are facing significant financial crisis because of their retirement programs. There are many factors at play for current and future retirement programs. I suggest one dig deeply in to current and future trends. And, above all, take control of your financial future… don’t just wait and let it happen!

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