Expand Retirement Options, Shrink Teacher Doldrums

This commentary appeared in the February 1, 2017, edition of The Marietta Daily Journal.

By Benita M. Dodd

PAGE, the Professional Association of Georgia Educators, has surveyed its members and the findings, reported in its January/February 2017 newsletter (PAGE One), are depressing.

The survey found that nearly half of teachers (45 percent) say they are unlikely to remain in education for the next 10 years. Sadly, a majority – 53 percent – also said they would not recommend a career in education.

The report notes, “With the current teacher shortage and continuing teacher pipeline issues, these statistics are of great concern to PAGE.”

The survey also found that 59 percent of the respondents oppose converting the Teacher Retirement System from a defined benefit (pension) plan to a defined contribution (401k-type) plan. This is no surprise, given that PAGE reports 70 percent of the respondents were “veteran classroom teachers with more than 10 years in service,” according to the article.

After all, if you’ve invested that much in your pension plan already, why would you want to change the benefits?

Here’s why: To draw young, enthusiastic new teachers into the “pipeline,” it’s important that understand two things. The profession has become far more transient, with people changing districts, states and careers. According to the Fordham Institute, the average experience of a teacher who leaves the profession is 15 years; fewer than one in four stay 25 years. Encouraging the profession means acknowledging the changing nature of education careers and adapting to that by facilitating portability of their retirement investment.

Second, the Georgia Public Policy Foundation’s Friday Facts of January 28, 2017 cites a Fordham Institute study that finds teachers are getting a raw retirement deal.

Fordham examined teacher retirement systems in the nation’s largest school districts and found teachers have to wait an average of 25 years before the value of their pensions are larger than what they contribute themselves. Fordham cited Gwinnett County, Georgia’s largest public school district, where this “crossover point” for teachers is 13 years.

A Gwinnett County teacher who leaves after five years of service (or at any point before the vesting point of 10 years) is not eligible to receive pension benefits at all, because she has not vested. Her pension wealth is zero, and at five years she has contributed a total of $14,276 into the retirement systems. (In reality, should this teacher separate from the systems before she vests, she can only take a refund, which may or may not be credited with interest.)

In summary: The article in PAGE One declares there’s a teacher shortage in Georgia and reports that teachers don’t plan to stay more than 10 years and discourage others from entering the profession. It’s befuddling that teachers and teacher organizations with a commitment to educating Georgia’s children would oppose – for new hires, at least – a defined contribution plan, a 401k-type plan. At the very least, offer new teachers the hybrid defined benefit/defined contribution retirement plan in place since 2008 for all new Georgia state employees (with an option for existing employees to participate).  

Portable retirement benefits would attract younger teachers by offering greater control over their careers so they don’t feel locked in or compelled to stay a minimum of 13 years in a profession merely to extract retirement benefits. 

To oppose a 401k-type system seems to be cutting off your nose to spite your face. As a teacher, if you care about the children, you should care about who’s left behind to educate them when you leave. And about what kind of taxpayer debt you’re leaving behind for those children to cover those over-extended, taxpayer-funded pension plans.

According to PAGE, there are currently 261,408 active TRS members and 119,038 retirees who receive an average monthly benefit of $3,068. 

Read more about Pension Reform in the Georgia Public Policy Foundation Guide to the Issues.

Benita Dodd is vice president of the Georgia Public Policy Foundation.


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