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| The Teacher Pension Crisis: Is There a Solution? |
| posted by: Ruthie | June 07, 2013, 03:39 PM |
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Teacher pensions are in danger in many states. Educators deserve a secure retirement; however, lawmakers have for years promised benefits that the system cannot afford. According to some estimates, America's pensions are underfunded by nearly one trillion dollars. This reality has caused experts to debate who is at fault, and what can be done to create a solvent system. Yesterday, the Thomas B. Fordham Institute held a panel discussing a new report, "The Big Squeeze: Retirement Costs and School District Budgets." Participants included Sandi Jacobs from the National Council on Teacher Quality, Josh B. McGee from the Laura and John Arnold Foundation, Charles Zogby, Pennsylvania's budget secretary, and Leo Casey, from the Albert Shanker Institute. The panelists discussed the teacher pension issue through the lens of three school districts: Milwaukee, Cleveland, and Philadelphia. One panelist simplified the situation in these three states, stating that the cost to repair these underfunded systems lie either on the state (tax payers), retired teachers, or new teachers. Something must be done to ensure that teachers are compensated fairly and currently retired teachers do not lose promised benefits. When Milwaukee was faced with a crippling pension situation in 2011, under Governor Walker's Act 10 labor reforms, retiree costs were deescalated by requiring employees to pay in to their pension accounts, instead of being covered exclusively by the district. Similarly, the Cleveland Metropolitan School District was able to scale back retiree costs by increasing taxes on new employees, whose future pensions will be funded differently. In Philadelphia, legislators have failed to adopt any new measures of pension reform, and are now paralyzed by a chronically underfunded system. The current climate threatens currently retired teachers, and those on the brink of retirement. In a profession where teachers traditionally take low starting salaries in exchange for pensions in retirement, a shift in compensation is inevitable. While this crisis will not be solved overnight, experts assert that it can be assuaged by new teachers negotiating their own salaries, benefits, and retirement programs. The AAE Membership Survey shows that the majority of teachers are in favor of these ideas. Specifically, 63% of teacher surveyed would prefer to negotiate their own contract so that they can negotiate a salary and benefits package that best suits their lifestyle. Another 87% would support a defined-contribution retirement plan for newly hired teachers. Additionally, 89% support an a la carte benefits plan where prospective hires could pick and choose salaries and benefits based on personal needs. Click here to watch the panel discussion in its entirety. What do you think about the teacher pension crisis? Comment below.
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