Teacher’s pensions and school budgets

Do you have a pension? More and more, they are disappearing as employers switch to defined-contribution retirement plans, such as 401(k) or 403(b) plans. And now I’m seeing more articles about the same switch happening to teachers, too.

For instance, according to the Lansing State Journal, the Michigan Senate just approved a bill that would end pensions for new public school employees, replacing them with “a 401-k style retirement plan.” The change is due, as it is in many places, to a growing unfunded liability in the current pension system.

Of course, we don’t know yet if the measure will be enacted. But seeing the article reminded me of how painful the choices have been for the past few years for those determining school budgets. Cut out the fat in school budgets? Sure. But when it comes to choosing between remedial reading and middle school band? That’s a hard decision, don’t you think?

Our report, Cutting to the Bone, explored how the recession was affecting school budgets, giving examples of the funding cuts and pension gaps schools were experiencing over a year ago.

What’s going on in your district? How would you make decisions like these?

–Rebecca St. Andrie


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