The first month of a new school year is an exciting—but stressful—time for school teachers. This is particularly true for young, newly-hired teachers who must quickly acclimate to their students, colleagues, and a professional environment.
In Pennsylvania, however, rookie teachers face an additional burden. A recent article in the Wall Street Journal explains how the commonwealth’s hemorrhaging pension system stacks the deck against young teachers:
The pension plans…are structured to favor the small minority who teach in a single system for a working lifetime, at the expense of the vast majority who leave the system much earlier in their careers.
Our state’s backloaded defined benefit pension system is a bad deal for younger teachers—not to mention workers who begin their career late or shift to another job. Fewer than 25 percent of Pennsylvania’s teachers will remain in the school system long enough to even become vested in their pension.
The WSJ article continues:
Under current plan structures, teachers accrue almost no retirement wealth in their first several years—then accrue substantially more as they near retirement age. The hypothetical Philadelphia teacher earns an average of about $1,326 in retirement compensation (in present-value terms) during each of her first 25 years of employment, followed by an average of about $37,593 during each of her last 10 years.
The Pennsylvania Public School Retirement System’s actuaries expect that about 80% of teachers will leave the system before their pension benefit is worth a single dollar. And according to a report last year from Bellwether Education Partners, more than half of all public-school teachers nationally will exit their school systems before their pensions vest.
Pennsylvania’s young public school teachers deserve better. They deserve a retirement account that is portable, and they deserve to own their retirement savings. Helping young teachers is yet another reason for Gov. Wolf to re-consider his veto of meaningful pension reform.