NSEA is dedicated to protecting defined-benefit pension plans because these plans provide a predictable, guaranteed benefit. NSEA’s leadership team, lobby team, and others help members defend their retirement security and advocates for these retirement programs.
WHY PENSIONS MATTER
Schools and students succeed when talented young people in search of a challenging career are recruited into the profession, and stay in it for the long term. Pensions help do that.
Pensions provide excellent retirement security.
A traditional pension plan provides retired workers with a steady income stream that is guaranteed for life — unlike 401k plans, which offer no guaranteed benefits and are leaving far too many Americans facing a retirement crisis.
Pensions are good for kids and schools.
A UC Berkeley Labor Center study of public schools in California found that “A large majority of teachers who survive the first few years of teaching, stay until at least early retirement age.” Keeping experienced educators in the classroom improves instruction and creates stable environments for kids. Since pensions help retain workers, they make perfect sense for public education.
Teachers prefer pensions!
Some states provide educators a choice between pensions and 401k-style programs. Once they read over the details, educators choose pensions.
America’s 401K experiment is failing.
Poor returns, high fees to Wall Street, and participants cashing out their funds prematurely — the list of problems with 401Ks goes on, and on. It is tremendously difficult just to know what your proper savings target should be and what level of savings will get you there.
Pensions measure progress toward funding goals and make adjustments each year in a systematic way, but 401k’s have no such planning mechanism. Simple questions like, “How much annual income could I have with $500,000, what would it be worth in tomorrow’s dollars, and will I run out of money?” become very difficult barriers to sound planning.
All these problems led directly to our retirement crisis, in which the median 55-to-64 year-old has only put aside about $14,500 for retirement.
Knowing all of this, claims that teachers would be better served in 401k’s are simply not credible.
Please visit Nevada PERS for more information.