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- Introduced by Rep. Bill Rogers (R) on March 10, 2009, to no longer grant the traditional “defined benefit” pension system to new school employees, but instead replace it with a “defined contribution” plan (401k type plan). This type of system that has been in place for state employees hired after 1996.
- Referred to the House Labor Committee on March 10, 2009.
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1) Re: 2009 House Bill 4527 (401k type pension for new school employees ) by gypsy on April 3, 2009A defined benefit plan is much better than a defined contribution plan. How many people with 401k's and 403b's who were ready to retire in 2008 have had to postpone their retirements because of the stock market crash? A defined benefit plan may be harder on accountants, but it's much more reliable for the pensioner. I oppose this bill.
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This really isn't so much about pensions retaining good teachers. You could have a defined contribution plan be more attractive than a defined benefit plan.
The main reason that the wise Mr. Rogers is proposing this is that it simplifies accounting, grants control of the retirement plan to teachers, rather than relying on the abilities of the state. The work that must be done to calculated a defined benefit plan is insanely complex, and expensive, and when you are all said and done, may not be much better.
I like the 403(b) style plans because I have more control over them. Also, they are very simple to account for, and budget for. Much of the financial problems that non-profits like schools & governments had stem from defined benefit plans that go wacky in times like this.
Good work, Bill Rogers.
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dear gh.
i do not see the attraction and retention of the best and brightest teachers as our state's highest priority. which is much the pity.
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