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Will the State Transition New Teachers?

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Under a plan proposed by the PA School Boards Association-as part of a larger discussion on what to do about the massive problems looming with the state teachers’ retirement system (PSERS)-new school teachers hired after June 30th would receive a "hybrid" plan that would combine features of defined benefit and defined contribution (401k) plans.

According to the National Conference of State Legislatures several states have plans that "provide features of both defined contribution and defined benefit plans…that do not allow an employee to choose between the two elements". Florida, Georgia, Indiana, Ohio, Oregon, and Washington fall into this category and apply to state employees, teachers, or both. Others-Alaska, Michigan, and Nebraska-use a defined contribution plan as their primary retirement plan after establishing a phase-in for employees hired on or after a particular date.

Predictably, the statewide teachers’ union does not like any proposals for change with the head of the union stating that such a plan would take "a secure retirement promise and erase it for our new members". It can be taken to the bank that union officials will resist alteration with the same ferocity that police and fire unions fought municipal pension reform.

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