Only one state, Alaska, offers teachers a mandatory, fully portable, defined-contribution retirement plan similar to a 401K. Five other states, Florida, Michigan, Ohio, South Carolina and Utah, offer teachers a defined-contribution choice.
In the 44 other states, the old-fashioned defined-benefit pension is the default option, according to NCTQs report card, which puts Alaska alone on top with an A, and Mississippi alone at the bottom with an F. Teachers in Mississippi contribute 9 percent of their salary to the defined-benefit plan and vest after eight years. After five years they can withdraw their own money with interest.
Illinois teachers will eventually see their retirement money get lower and lower as Illinois won’t be able to keep up with the increased demand for retirement money. Switching now will save Illinois taxpayers millions and then billions. Teachers will also be able to invest in Social Security to increase their 401 retirement.
David Holmes, Belleville