A 20th century retirement system for a 21st century workforce

As Andy Rotherham points out in this brief interview, Coloradans become teachers for all kinds of reasons. It makes sense to have a modern public pension system that is flexible enough to match these diverse motivations and needs.

The problem in a nutshell is, “We have a 20th century retirement system for a 21st century workforce.”

Why doesn’t the current pension system work for most teachers?

 

Andy is co-founder and partner at Bellwether Education Partners and regular writes and speaks on teacher pensions. Follow him on Twitter – @arotherman – for frequent updates.

2 Comments

  • Dave Dillman says:

    Sorry, Andy. You are wrong on several reasons on your “for starters” comment about “the system being set up for teachers to teach in one place for 30 years” – Please follow this link for all the PERA employers where teachers can take their skills within Colorado. At last count their where 178 districts and in many cases, dozens of schools within each district.

    https://www.copera.org/employers/affiliating-pera/affiliated-employers

    Next, I’d like for you to respond to the recently released report (link below) from the Colorado Office of the State Auditor, which shows that teachers who leave teaching in Colorado actually do better with their PERA retirement plans than any other reasonable alternative. Even those who teach as little as three years do better with leaving their service in with PERA than with any other option of what to do with that money. Here is the link to the full report:
    http://www.leg.state.co.us/OSA/coauditor1.nsf/All/10A3590D2063592E87257E70004B7FBD/$FILE/1409P+-+Colorado+Public+Employees%27+Retirement+Association+%28PERA%29+Hybrid+Defined+Benefit+Plan+Study.pdf

    After reading the report, please be honest with your Colorado Pension Project constituents: Colorado PERA delivers the most efficient return for the money possible and is doing an excellent job for the taxpayers in Colorado.

    • Colorado Pension Project says:

      Dave, your comment is accurate that teachers can take their skills many places within Colorado – but if they need to move across state lines, their total pensions will be considerably less than if they stay in the same state for their entire careers. This means that people who need to move to care for an ailing parent or with a significant other are not on a path to a secure retirement.

      As we mentioned in response to your comment on another blog post, we’d encourage you to read a recent column from The Denver Post (http://www.denverpost.com/perspective/ci_28499477/great-pension-debate), in which the authors discuss options to address PERA’s massive debt and talk specifically about this study, as many experts disagree with its results. As the article points out:

      Robert Costrell, professor of Education Reform and Economics at the University of Arkansas, has disputed the need for such [transition cost] payments.

      “GRS’ main ‘transition cost’ argument — accelerating payments on the State Division’s unfunded liability by $800 million in the first year — is completely bogus,” Costrell said. “There is no logical financial link between changing benefits for new hires and the pace of payments on liabilities accrued by old members.

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