Eighty-five percent of the respondents in a state School Boards Association online poll said new school employees should be able to choose a 401(k)-style pension plan, the group said today. The number of people who participated in the poll was 550.
“The creation of a new pension tier, which provides a defined contribution and the option to enroll in a 401 (k) plan, is the best way to ensure future employees receive the benefits they deserve while also ensuring our students receive the education they deserve,” Timothy G. Kremer, the state School Boards Association’s executive director.
Gov. Andrew Cuomo has proposed a new, less generous pension tier that would provide that option. It would be be voluntary. The new pension tier, which is opposed by public-employee unions, would increase the retirement age from 62 to 65 and prohibit early retirements; increase employee contributions from 3 percent to 4 percent, 5 percent or 6 percent, depending on the salary level. The state would save $113 billion over 30 years, the governor has said.
Sixty percent of respondents to the School Boards Association’s poll said they think 401(k)-style pension plans would be adequate for retirement. Twenty-seven percent said it would not and 13 percent said they didn’t know.
One out of five classroom teachers leave the profession each year within their first five years,
A 401(k)-type system would allow teachers who don’t work long enough to be vested in the traditional defined-benefit system to take their benefits with them, the association said. In a defined-benefit system, they would leave their pensions behind in that scenario. The group cited a state Education Department statistic that one in five classroom teachers leave the profession each year within their first five years
“Stabilizing pension costs is imperative for schools and local governments across New York,” said Kremer. “If we don’t act now, the amount of taxpayer money needed to cover the costs of employee pensions will soon be well above the state’s 2 percent property tax cap.”