In this year’s legislative session, teachers saw a potential attack on our pensions turn into a reasonable, bipartisan compromise. Lawmakers rejected a plan to switch newly hired teachers to risky defined-contribution plans. Unfortunately, we can expect the same attack next year. This would be wrong for South Carolina.
I have always loved science and wanted to share my passion with children, and I have been a science teacher for eight years in Aiken County and 19 in York County. I’m proud of the years I’ve worked to make sure generations of children are prepared to enter the real world.
When I retire, I know I can rely on my defined-benefit pension. On average, S.C. public employees receive an annual pension benefit of $21,013 — a modest sum that will help support my family and me in retirement.
Teachers and other public retirees contribute greatly to our local economies.
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According to the National Institute on Retirement Security, state and local pension-fund benefits in South Carolina support a total of $3.8 billion in economic output in the state and $2.1 billion in value added in the state. Each $1 in taxpayer contributions to South Carolina’s state and local pension plans supports $4.65 in total output in the state.
Switching newly hired teachers and other public employees to 401-type pensions will directly harm our local economies. The average 401(k) account balance in South Carolina is only $20,630 — clearly not enough to retire with.
The second major problem with switching new hires to a defined-contribution plan is recruitment and retention.
For example, say you are a recently graduated teacher and you have been offered jobs in Georgia and South Carolina. The average teacher salary in Georgia is $52,880 and the average annual pension benefit is $27,583, but here in South Carolina the average pay is $48,375 and the annual pension benefit is $21,013. Which one would you choose?
South Carolina should be doing more to bolster our pensions, not advocating for them to be torn down. Next legislative session, I urge our lawmakers not to switch new hires to defined-contribution plans, but instead to look for ways to make pensions better.
Our local economies and recruitment and retention depend on it.