Third Way has a new brief suggesting three steps the federal government could take immediately to improve retirement security for all teachers. To address widespread under-funding, state and local pension plans have made it harder for teachers to qualify for a retirement benefit, raised contribution rates, and changed benefit formulas to penalize teachers not willing to commit to a full career in one spot. They note that teacher pension plans are actually moving in the opposite direction of workers in the private sector:
So while the vast majority of American workers are being afforded greater retirement security under federal law—and better assurances that they will get to keep the money their employers are contributing off the top of their salary—teachers have found themselves at the whim of state legislators that in most cases are making it harder for them to qualify for even a minimum pension.
Their solutions are sensible: 1. Have the IRS lay out clear guidelines outlining what constitutes an acceptable alternative plan; 2. Require state governments to either offer Social Security to their workers or provide more teachers with at least a minimal retirement benefit; and 3. Update federal guidelines to ensure state and local pension plans offer retirement benefits that are at least as generous as those of non-public-sector plans. Read the full brief here.