Teacher pension fight pits portability vs risk
Lansing — Republicans pushing for teacher pension reform argue 401(k)-style retirement saving plans are a better deal for young educators, who are now at risk of losing some guaranteed retirement benefits if they leave public education.
State records show that nearly half of all teachers and staff paying into the system today are not yet “vested,” meaning more than 100,000 members have not yet worked the 10 years required to guarantee pension benefits.
If they left public school employment today, they would qualify for a refund of their own contributions, plus interest, but forfeit all service credit they had earned toward a pension. They don’t lose any money in a retirement savings plan, say GOP legislators, who want to close Michigan’s teacher pension to new hires.
But the “hybrid” state pension plan provided since 2010 allows educators to vest at least a portion of their retirement benefits within two years. Supporters say the promise of a long-term pension payout remains a big draw for prospective job seekers and a significant reward for dedicated professionals.
Read more: http://www.detroitnews.com/story/news/education/2017/06/04/teacher-pension-battle/102503684/