The Texas legislature passed a bill Thursday aimed at shoring up the state teachers’ pension fund and giving its retired members a standalone bonus.
The bill would increase state contributions to the $154.3 billion Texas Teachers Retirement System by 2% over the next five years and give the retirees a one-time “13thcheck” of a maximum $2,400 by September 2020 in addition to their monthly checks of the same amount.
The original version of the bill, passed in March, would have increased contributions from the state, school districts, and current school employees, while shrinking check 13 down to a $500 cap. The money would have come from $542 million in Texas’ savings account.
The first public pension plan for teachers was established in Manhattan in 1894. In the 1910s, six states established teacher pension plans. More states followed suit and now the overwhelming majority of public school teachers in the United States participate in traditional defined benefit pension plans. These plans have successfully provided a secure and reliable retirement for teachers for decades. Despite their record of success, however, teacher pension plans are under attack nationwide.
You have to give Amazon credit. In a rare public auction, the retail giant promised up to 50,000 jobs at a second headquarters, or “HQ2,” and sat back while 238 cities and states tripped over each other to offer the most lucrative tax break packages. While most of the bids have yet to be disclosed, some are staggering, especially considering the same states have recently claimed they don’t have money for pensions, education, infrastructure, or other state priorities.
Washington, DC – A report released today by the National Public Pension Coalition found that charter schools in certain states are not providing an adequate retirement for their teachers. When charter schools opt out of public pension plans, they instead force teachers into risky 401(k) plans or don’t offer a retirement plan at all. The report found, in all states studied, that charter school teachers would be better off if they were able to join the state’s pension plan.
Today ends the week known as National Retirement Security Week. Although the week started in 2006 as a week to raise awareness about the importance of saving for retirement, progress since then suggests the more apt title for the week should be National Retirement (In)Security Week. Many Americans have no savings at all for retirement, and those who do are likely to find themselves woefully unprepared financially for their golden years.
Who doesn’t love choice? Chocolate or vanilla? Cheese or pepperoni? Boutique fitness studios have popped up everywhere so no matter what your preferred workout, you can have it. Lawmakers in some states like Michigan, Florida, Pennsylvania, and Indiana have co-opted our national love of choice as their preferred method to attack retirement security. Although a recent Gallup poll found that 51% of Americans would leave their current job for a position that offered a defined benefit pension, these politicians are pushing for choices that no one wants.