My Turn: Dismantling retirement system leaves teachers with no safety net

Posted: Thursday, April 28, 2005

With just a few days left in the legislative session, opposition is growing fast to proposals that would dismantle the state's retirement system. Firefighters, police officers and other public employees have joined teachers and education support professionals in speaking out against the proposed legislation.

In addition, the Legislature's own actuarial consultant told lawmakers that their proposed defined contribution plan "is not a reliable vehicle to produce financial security at retirement." And groups continue to point out the flawed assumptions on which the state's contract actuaries have built their case.

In light of the growing chorus of doubts, opposition and unanswered questions, we urge lawmakers to slow down and take a deep breath. A handful of days is not nearly enough time to do the additional homework that needs to be done. Before we commit ourselves to this untried plan, let's all make sure we know the consequences (intended and otherwise) of such a total rewrite of the retirement laws. We urge lawmakers to appoint an interim subcommittee to work over the summer and fall and give this matter the time and attention it deserves.

One unintended consequence of taking action too hastily: Dismantling the retirement system would be a body blow to our public schools. Its impact would fall hardest on Alaska's children, and our own future. Here's why.

A quality teacher in every classroom is the single most important ingredient in student achievement. As a small state, Alaska will always have to hire about 75 percent of our teachers Outside. But school districts are already having trouble attracting and retaining the quality teachers our children deserve.

Too many teacher salaries are no longer competitive in the marketplace. Add in a dicey retirement system in which the teacher has to assume all the market risks, and the incentive to move to Alaska just about disappears.

Under the plan being put forward now, any young teacher who started work this fall and taught for 30 years would see her hard-won retirement income consumed by health insurance premiums. She could be eating cat food and - because she could no longer afford to keep her house - living outside.

But that's not the worst of it. Alaska is not a Social Security state. For teachers and the vast majority of other school employees, those benefits are either unavailable or greatly reduced.

Despite these disincentives, an eager young teacher or other school employee may sign on with a school district. But will they stay? We doubt it. And when they do leave, under the proposed new plan's portability provision, they'll take their retirement account with them. Portability in a retirement plan would work against the districts' need for a stable, committed group of teachers and support professionals. The costs of high turnover would be measured in training and mentoring dollars walking out the door. But it would also be measured in the lack of continuity and stability in our children's learning.

For Alaska's teachers and support staff, for Alaska's schools, and for Alaska's children, we urge legislators to take the time to get it right. NEA-Alaska has many members who have served on the Teachers Retirement System board and understand retirement issues well. We stand ready to work with lawmakers over the interim to achieve the goals that we both share: 1) a retirement system that rests on a firm financial foundation; and 2) a safe and secure retirement system for teachers, education support professionals, and other public employees.

• Bill Bjork is president of NEA-Alaska, a union that represents 12,500 teachers and education support professionals.



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