We face a crisis in education: we are recruiting and retaining too few teachers. Only 30% of teachers stay for ten years, the time required to vest in the Teachers’ Retirement System. Why is this happening? There are many reasons. The ever-increasing demands on the time and energy of teachers certainly is a factor. So is the low comparative salary.
The average starting salary in Connecticut for a teacher with a masters’ degree in education is $45,000, far less than that of their classmates who got their masters’ in finance, engineering, or healthcare. An estimated one in six teachers work second jobs. Clearly, the requirements of the job and the salary it receives too often drive young people who are already crushed under the weight of student loan debt to search for a different career.
The Yankee Institute recently released a “study” that determined the reason was actually something quite different: new teachers leave the profession because they do not want a defined benefit pension. Their solution to the lack of new teachers, arrived at after a litany of misleading information and non-factual conjecture, was the Yankee Institute’s constant talking point: eliminate the defined benefit pension and put everyone into 401(k) style defined contribution plans. The idea is ludicrous on its face, and becomes more so once examined.
Yankee Institute President Carol Platt Liebau was quoted saying “Connecticut’s teacher pension system needs to be reformed in order to meet today’s young workforce and save taxpayers money.” Exactly what kind of reform does she have in mind? Closing the pension system to new hires and pushing new teachers into defined contribution plans?
Recent studies have shown increased difficulties in recruiting and retaining qualified teachers after closing pension plans to new hires. States that switched from a defined benefit pension plan to a defined contribution plan did not address existing pension underfunding as promised. Instead, costs for these states increased after closing the pension plan. The experience of the states outlined in this study show that changing benefits for new hires does not solve an existing funding shortfall, and that changes in plan design result in greater retirement insecurity for employees.
Stop trying to sell risky defined contribution plans as the better choice when we all know that it isn’t factual. What research does prove is that 401(k) style plans cost an average of 48% more to run than defined benefit pensions. What research does prove is that unlike pensions, investments in 401(k) style plans are not pooled together, leaving retirees more vulnerable to economic downturns like the one we saw in 2008 and could very well see in the future. What research does prove is that with defined contribution plans, retirees run the risk of outliving their savings. This is not the true retirement security our teacher’s deserve after spending their careers devoted to teaching our children.
Unfortunately, Connecticut has been left to catch up on decades of pension liability fueled by past administrations’ borrowing against Connecticut’s pension funds rather than diligently making their payments. Responsible funding of pension plans is key to managing legacy costs associated with these plans. As Connecticut’s treasurer Sean Wooden has stated in response to the Yankee Institute’s study: “I reject the idea that school choice is a quick-fix to our very real and complex teacher pension liability issue in Connecticut. The study, which was authored by a school choice advocate, draws broad conclusions from select data….. The Connecticut teacher retirement restructuring approved earlier this year was an important step in creating a more transparent picture of the true unfunded long-term liabilities and a realistic plan to address them.”
To say that work isn’t being done to find a more sustainable answer to our Teacher’s Retirement System is simply untrue. We need to stop making excuses to avoid providing the teachers who play a pivotal role in our children’s young lives with the benefits and the respect that they have earned and deserve. Cutting their benefits as a solution to a problem should never even be considered an option.
But in order to truly do what’s best for our teachers and for the children and the communities they serve, we need to do much more to encourage young teachers to stay in the profession. We need to raise salaries, improve working conditions, and ensure that teachers have the necessary resources available in order to provide the best learning environments for their students. Strengthening their defined benefit plan is one small piece of how we do that.
Alisha Blake is Campaign Coordinator for the Connecticut Coalition for Retirement Security, New London
Many good points but ultimately a one sided argument presented in an unbalanced way. It takes two to tango – politicians and union management. Deferred payments into pension funds have been used as a tool to leverage higher retirement salaries, unrealistic benefits and unheard of private sector clauses like “no layoffs”, “guaranteed pay increases not based on merit or performance but longevity”, “unreasonable assumptions on returns on investment” and so on – these were foolish mistakes agreed by BOTH parties, the people,involved should be ashamed of their behavior.
The reality is the state does not have anywhere close to enough money to pay benefits and without significant economic growth and that is not happening without economic reform, including a claw back of unrealistic labor agreements (primarily older tiers) to be in line with those of the private sector.
I think biggest problem with unions and teachers is they need only to work 20 years to receive a golden pension unlike the private secret that needs to work 45 years plus and possibly have had 401k most of there lives.Can you image what it would be like if the private sector could retire in 20 years also with the same retirement packages as state workers?
Comparing starting salaries and jobs between teachers and the private sector is a false equivalence.
The school year is 180 days, many of which are ‘half’ days. At best, that’s 36 weeks. I don’t know any full-time private sector job that works 36 weeks. Many of those workers work six days per week. Teachers eventually receive tidy ‘guaranteed’ pensions and tenure. Getting rid of a teacher is darmed near impossible. Their contracts are negotiated with politicians who often depend upon ‘support’ from the very people for whom they determine pay levels. That ain’t too shabby.
I’m not saying teacher salaries aren’t a valid topic for debate, but let’s please put away the Teacher Unions’ crying towels.
another obvious point..every teacher I know recently hired (and I know many as I have 2 daughters in early 20s) was hired with an undergraduate degree and then got a masters on the job at night and summer days. To compare someone who got a masters in engineering hired by EB for 65k(know one) to a starting teacher working on a masters would be like comparing Roger Federer to your town tennis champ.
Not sure what the answer is here, However, maybe transitioning teachers and other state workers as being Social Security eligible will provide a mechanism to minimize total dependency on an underfunded pension system. Additionally, it would provide retirement savings portability, for those that have short tenure. Many private sector workers used this approach for retirement savings. It included SS, Pension Income and Personal Investments and Savings. A transition to this model wouldn’t penalize teachers, but instead normalize how retirement income is accumulated, while ensuring that get back what they put in.
If the CTRS were to choose to join Social Security, it would have to pay a huge initial sum to SS for the whole plan to qualify for SS. It may be that they could change the plan to allow new participants to be eligible for SS but of course the new participant would have to have the 6.2% deducted and the Municipality would have to match that. Presumably the new participant would also have the 7% to the TRS deducted to be eligible for TRS pension benefits.
Over 35 states already include teachers as part of the Social Security Program. It is the right solution for teachers, and the state.
Alisha Blake says:
“The Yankee Institute recently released a “study” that determined the reason was actually something quite different: new teachers leave the profession because they do not want a defined benefit pension. Their solution to the lack of new teachers, arrived at after a litany of misleading information and non-factual conjecture, was the Yankee Institute’s constant talking point:”
I just now read the 25 page study. Nowhere in that study, does it say that teachers leave the profession
because they do not want a defined benefit pension! The study says teachers who leave before their 10 year receive no benefit and have earned no credit for Social Security. “The lack of portability of teacher retirement benefits penalizes mobility and partial careers. Only 30% of teachers stay in the system long enough to receive benefits that are close to peak pension wealth accrual.”
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