Teacher Retirement Plan Threat

GA Senate Bill 152

 

The Wolves Are Out of the Closet, Posted by Jim Arnold, 5/6/15, SB 152 is sponsored by Hunter Hill (R-Atlanta), Francis Millar (R-Atlanta) and Curt Thompson (D-Tucker).  

 

It creates a hybrid retirement system named “Georgia Teachers Pension and Savings Plan” and is written to cover new teachers on or after January 1, 2017.  Teachers currently covered under TRS may remain in TRS as long as they maintain active membership.  Current TRS members have the option of enrolling in the new plan.  This sounds a lot like “if you like your plan, you can keep your plan” doesn’t it?

The new defined benefit plan allows members to contribute between 5 and 6% of their salary, and they will receive 1% of their highest average monthly salary multiplied by their years of service.  The current benefit is 2%.  No cost of living adjustments for contributors will be pre-funded by the legislature, accumulated sick leave is not available for inclusion and service credit transfers from other positions is only allowed for TRS covered positions, ERS or specified military service.  Current TRS rules allow transfers of service credit from some federal positions, some private schools, some colleges and universities and some private schools.  Salary increases of over 5% in a 12 month period will not be recognized.

The 401K defined contribution plan, the second part of the bill, allows members to be enrolled at a 5% contribution rate, they may not be allowed to withdraw money from their 401 K while employed in a TRS covered position, limits employer contributions to 1% plus up to 50% of a total of 2% of the employee salary and members will be vested in the system after 5 years of service.

This bill represents a significant reduction in benefits for anyone entering the teaching profession after January 1, 2017, and is being sold as a plan that allows teachers to keep their retirement plan if they choose to change professions.  In other words, it removes one of the incentives for teachers to stay in teaching for more than 5 years.  What a bargain!

Just after the turn of the century, the Georgia Legislature called for a “fiscal study” to look at the Employee Retirement System, presumably because it was costing the state too much money. The ERS became, in 2007, a defined contribution program like the one being proposed for TRS.  Now, in addition to low pay, low morale and increased insurance costs (sound familiar, teachers?) the ERS retirement package provides even less incentive for state workers to stay in their positions for any length of time.  Ask a state employee what they think of the defined contribution retirement program.

It would seem our Legislature, in lieu of making teaching a more attractive profession, has found a way to make it even more unattractive to prospective teachers by proposing changes to TRS.  It’s apparently not enough to under fund education through austerity cuts that have been a staple of the education budget since 2003, micromanage teacher evaluations by adding junk science VAM, script test-centric teaching through Common Core standards, blame teachers for societal issues they did not create, grade schools through a CCRPI method designed to produce failure, burden teachers and students with standardized testing that again and again points out the effects of poverty on standardized test scores in the zip code effect version of “if we measure it enough it might go away,” agree to restore health coverage for under-paid part time school employees by “allowing” local systems to absorb the costs, give legislative lip service to “local control” and “individualized learning” while insisting on the same thing at the same time for every student, restoring part of the austerity cut in an election year and having the gall to call it an “increase for education” and now, to add insult to injury, propose a reduction in retirement benefits for the profession they all love to hate.

It’s little wonder that enrollment in teacher training programs in Georgia has decreased significantly since 2011.  UGA noted a 28% decrease in its teacher education program since that time, and KSU is down 23%.  Overall, teacher training programs in Georgia are down over 15% in the last 4 years.  That means over 6,000 students in Georgia have chosen NOT to become teachers, and just when we need them most.  Perhaps this is a sign that our Legislators need to rethink their priorities...or is it?

Perhaps this is just another road sign along the ALEC highway to the privatization of public education.  The American Legislative Exchange Council encouraged states to convert their defined benefit public pensions to 401 K and/or defined contribution plans with a report last August entitled “New Report Provides Solutions to State Public Pension Dilemmas” (http://www.alec.org/new-report-provides-solutions-to-state-public-pension-dilemmas/.)   Also listed on the ALEC website is model legislation for a pension reform act suitable for framing...or reframing, as the case may be.  See for yourself  http://www.alec.org/model-legislation/defined-contribution-pension-reform-act .)  You won’t find it on the ALEC website, but other sources list Fran Millar as a member (along with other members of the Georgia Legislature) of ALEC.  

The National Public Pension Coalition issued a statement about just such legislation as this in other states.  “When states have adopted pension overhaul legislation, they have found that it came at a significant cost.  Alaska and Michigan went down that road and saw their pension debt increase.  West Virginia adopted a 401 K like plan for public employees in 1991, but reversed course in 2006 after a report found that public employees had such low incomes in retirement that they were eligible for means-tested public programs, driving up costs to the state.”   The Plot Against Pensions noted that in Rhode Island, often used as a model by ALEC, costs were driven up by exorbitant fees to Wall Street money managers so much that Forbes Magazine called it “just blatant Wall Street gorging.”

I haven’t talked to any teachers yet, working or retired, that think this is a good idea.  In the interests of fairness, I will proudly tell you that I served in public education for over 39 years, and retired as a TRS member in good standing in July of 2013 with a little over 30 years in Georgia public education and I talk to teachers almost every day.  Maybe that’s the problem.  Maybe our Legislators don’t spend enough time talking to teachers, employed or retired.  If they keep finding bad ideas like this one, there may not be enough teachers left to talk to. I suppose we all knew it was coming.  The temptation of messing around with something that’s working as well as TRS is just too much for some politicians to resist.  Those billions of dollars that teachers put in there is just too tempting a target, and could be used for so many other things if only teachers weren’t so stubborn about it.  It’s probably no surprise to anyone that the Senate and House Retirement Committees will hold a joint meeting on Thursday, May 7 at 10am.  I have already contacted my Legislators and told them my opinions about adding yet another bad idea to an already full bag of bad legislative ideas concerning public education.  I hope you do the same.  Do it now.  The wolves have come out of the closet and are hiding behind the couch in the ALEC room.  ALEC is watching, and if you are in public education or have a child in public education they are not your friend.

http://drjamesarnold.blogspot.com/2015/05/the-wolves-are-out-of-closet.html?spref=fb

Source: Educational Freedom Coalition, https://www.facebook.com/groups/1429786443902174/permalink/1622260481321435/

Comments

Defined Benefit Plans are unsustainable. Most private sector companies dumped theirs over the past 30 years because they are subject to stock market bubbles. The 401K has replaced the DB Pension plans for most employees. The balances in the 401K plans vest in 5 years and are portable. DB Pension plans usually require employment until retirement at age 65, or 30 to 35 years of service.

The auto industry initiated a wage reduction on a pivot date in the 1970s to recognize that rates of pay were unsustainable. This was not a popular move at the time. The US auto industry finally off-shored manufacturing.

I would first close the USDOE and put parents and teachers in control of public education. I would make students responsible for learning to read, write and do math. I would remove all propaganda from the classroom.  Parents need to instill the values they want to instill and ensure that their kids are learning the basics.   

I would bar State Legislatures from interfering and repeal all State Education Laws. Public Education is a County School Board function. I would urge all schools to look at what Homeschoolers are doing.

Norb Leahy, Dunwoody GA Tea Party Leader