One possibility is to switch the default option for entering teachers to the defined. Contribution plan—something that is likely to drive more teachers in this direction. A more direct option would be to simply close the traditional pension plan to entering teachers (while preserving the status quo for current teachers and retirees) and offer only a defined contribution plan moving forward.[2] Several other states have done this for public sector workers, as have numerous private employers.
Though not likely an easy transition
It would require a plan (and probably money) to Australia Phone Number List cover existing pension promises to teachers—this type of “soft freeze” would be a first step in permanently ending the traditional pension and the long-term risks it poses to the state, taxpayers, and schools. Some may also worry that these moves could stir a hornet’s nest. That’s a fair concern, and leading this change wouldn’t be for the faint of heart. Yet beneath the union front, survey data suggest that teachers are open to 401(k)-style plans. In a recent national survey of public employees, Joshua Rauh of Stanford University found that nine in ten said they would be willing to switch to a defined contribution plan, provided their employers make a sufficient contribution (10 percent of salary was the median amount).
A national survey by the
Equable Institute found that a slight majority of CW Leads teachers (54 percent) indicate an openness to a change in retirement models. Political backbiting and fiscal excess are baked into the traditional pension model, so it’s hard to believe that the drama at STRS will simply go away. The time has come to end the spectacle. Let’s stop making educators pawns in a massive pension scheme and instead treat them like the adults and professionals they are. It’s time to let Ohio teachers chart their own course to retirement. [1] Ohio teachers, regardless of plan, do not participate in social security. STRS also offers a “combined plan” that offers features of a traditional pension and defined contribution plan. [2] While likely more politically challenging, the state could also institute a “hard freeze” in which current teachers stop accruing pension benefits and would transition to a defined contribution plan.
