Which state pension is most likely to be affected by the US Supreme Court ruling?
- September 4, 2021
In a ruling expected to reverberate around the world, the Supreme Court ruled 5-4 on Tuesday that the state’s “group pension” for older workers can be adjusted in the face of the court ruling.
The decision, which is likely to affect millions of Americans who are already at risk of losing their pensions, could also impact many retirees who rely on these types of payments.
The Supreme Court’s decision in favor of a pension adjustment for the state pension has long been a rallying cry for retirees who worry that the court could impact the future of the pensions of tens of millions of American workers.
But the impact on the state-run pension system has been less clear.
“It’s a big deal.
It’s going to affect people that are currently eligible for state pensions, but it’s not going to impact them in the future,” said David Oates, a senior research fellow at the Center on Retirement Security at Rutgers University.
“That’s the biggest problem right now.
What does that mean?
The ruling has caused some uncertainty, with many states that rely on the group pension system and which had already decided to adjust their contributions for the ruling still not ready to release their calculations. “
If you think about the effect it’s having on the economy, it’s a pretty big effect,” he added.
The ruling has caused some uncertainty, with many states that rely on the group pension system and which had already decided to adjust their contributions for the ruling still not ready to release their calculations.
However, several of the states that have yet to make their final contributions are now saying they will continue to adjust payments.
“I think they’re going to adjust to whatever is going on, which will affect us, but we’re going ahead and doing it,” said Bill Reiter, an economist at the Boston Consulting Group.
“We’re going forward with our adjustments.”
Some states, like Oregon, that rely heavily on the pension system to maintain its financial stability are also beginning to adjust, although they are still waiting for their final calculations.
Other states that had been making their payments to older workers were still adjusting.
“The federal government is still reviewing the case,” said Richard Easley, a spokesman for the U.S. Department of Labor.
“As soon as it’s done, the Department will review all of the payments.”
If the state has made its payments to its older workers, the next step would be for the federal government to make its final payment to the states.
If the federal payments are not finalized, some states may have to take back some of their payments in order to compensate older workers who have been eligible for them.
A similar scenario occurred with pensions for state workers who were eligible for their pensions when the court’s ruling came down.
The state’s pension adjustment will affect people who are currently in the pension pool, and the state will have to compensate those who have lost their pensions.
The effect on those older workers is likely going to make it harder for them to qualify for their state retirement benefits.
For some older workers and their families, the prospect of having to pay back their state pension will be particularly painful.
“You have to pay your state pensions back when they’re no longer working,” said Carol Smith, a retired teacher who works in North Carolina.
“Your state is still paying you back, but now you’re going into the process of making the payment to make sure you’re not going into bankruptcy.”
The state will likely need to take some of the $1.8 billion it was paying out to its workers into a trust fund to help pay for its pension system, which has been struggling to maintain financial stability.
The trust fund will likely have to be administered by the states, which could be complicated.
In addition, many state workers will need to file a separate federal tax return and have to go through additional IRS filings to get their federal taxes paid.
“People that have retired from state jobs that are still with the state now have their taxes due and they have to file tax returns.
The only way they’re supposed to file these returns is to go to a federal tax shelter, which can be pretty expensive,” Smith said.
If some of those people have been receiving their pension payments from the federal system, they could face a hardship if they had to take any of the state payments back.
“What I can’t imagine is for someone to take a pension payment in a state that’s not paying it to them.
That’s going over the line,” Smith added.
