Welcome to the latest edition of This Week in Pensions! We have gathered the top stories about pensions and retirement security from the previous week.
Trump Administration Moves to Allow Riskier Assets in 401(k)s
Trump is set to sign an executive order opening the door for 401(k) retirement accounts to invest in “alternative assets” — such as private equity, real estate, and cryptocurrency.
Proponents claim these investments could generate higher returns for younger workers, but critics—including Senator Elizabeth Warren—warn of increased risks, high fees, and a lack of transparency. These assets are generally harder to sell quickly and require less public disclosure than traditional investments, such as stocks and bonds.
This change would apply to defined contribution plans, not defined benefit pensions. Unlike defined contributions, public pensions pool investments, are professionally managed, and spread risk across generations of workers, which means retirees receive a guaranteed lifetime benefit regardless of market swings. In contrast, 401(k)s place all the investment risk on individual workers, who may not have the expertise or resources to manage complex and high-risk assets, such as private equity or cryptocurrency.
If these high-risk investments perform poorly, it could leave millions of 401(k) participants with smaller nest eggs, or force them to work years longer before retiring. Public pensions remain the most secure, cost-effective way to pro
vide retirement income, without gambling workers’ futures on Wall Street’s riskiest bets.
Iowa Task Force Proposes Weakening Public Pension for State Workers
The Iowa Department of Government Efficiency (DOGE) task force has released 45 recommendations aimed at “streamlining” state services. Among them is a proposal to shift new state employees out of the Iowa Public Employees’ Retirement System (IPERS) — a defined benefit pension — and into a 401(k)-style defined contribution plan.
The task force claims the change would align state benefits with the private sector, but in reality, it would undermine retirement security for future public workers. Moving to a 401(k) system would strip away the guaranteed lifetime benefit IPERS provides, place all investment risk on individual employees, and likely cost taxpayers more over the long term due to higher turnover and lower recruitment.
Public pensions like IPERS are not just benefits—they are critical tools for attracting and retaining qualified workers in public service. Weakening them risks driving talented professionals away from state jobs, just as Iowa faces teacher shortages, rural staffing challenges, and competition from neighboring states with stronger benefits.
States Step Up to Address America’s Retirement Savings Gap
While many Americans still lack access to workplace retirement plans, a growing number of states are taking matters into their own hands with auto-IRA programs. These programs automatically enroll workers whose employers don’t offer retirement benefits, helping them save through payroll deductions.
Nevada is the latest state to launch such a program, expected to cover nearly 500,000 private-sector workers. The state joins 19 others—including Oregon, Illinois, and Colorado—in offering this option. So far, these programs have helped more than 1 million Americans start saving for retirement, with over $2 billion accumulated.
While auto-IRAs are a valuable tool for workers without any retirement plan, they are not the same as a pension. Auto-IRAs are individually owned accounts that fluctuate with the market, and the balance can run out during retirement. In contrast, defined benefit pensions— like those earned by public employees—provide guaranteed lifetime income and are far more effective at preventing senior poverty.
Still, the growing state-led retirement savings movement underscores a critical truth: Americans need more access to reliable retirement plans, not fewer. And it’s why protecting existing public pensions—the most secure model we have—should be a national priority.
Low Pay and High Burnout Fuel Missouri Teacher Shortage
Missouri is facing an unprecedented teacher shortage—a crisis fueled by some of the lowest teacher salaries in the nation, rising living costs, and high rates of burnout.
Nearly one in four Missouri teachers works a second job to make ends meet, and many pay out of pocket for classroom supplies. Missouri ranks 50th in starting teacher pay at just $36,829 and 47th for overall average salary. By contrast, neighboring Illinois offers starting salaries more than $6,500 higher and pays veteran educators about $20,000 more.
While teacher retention has slightly improved since the pandemic, early-career teachers—particularly teachers of color and those in urban or rural districts—are leaving at disproportionately high rates. The result is a destabilizing turnover that hits high-need schools the hardest.
The state’s Department of Elementary and Secondary Education has rolled out a new “Teacher Recruitment and Retention Playbook” with strategies like increasing pay, improving working conditions, strengthening support systems, and giving teachers a voice in policy decisions. But as veteran educator Towina Jones put it, “More respect and value definitely needs to be put back in the profession.”
For public school teachers, a defined benefit pension is often one of the few financial incentives keeping them in the classroom despite low pay and high stress. Protecting these pensions is critical—they not only help retain experienced educators, but also ensure they can retire with dignity after a career of service.Be sure to check back next Friday for the latest in the fight for a secure retirement! For now, sign up for NPPC News Clips to receive daily pension news from across the country directly to your inbox.