Teacher Pensions Blog

What are the implications of last night’s midterm elections for pensions? I see three implications going forward:

1. Gina Raimondo, the Democratic governor-elect in Rhode Island, once again demonstrated that good pension policy can be good politics, too. Raimondo rose to national prominence as she championed reforms to the state’s under-funded and poorly structured retirement plan. She successfully ushered in a new plan that will save the state billions of dollars and improve benefits for the vast majority of teachers. Although the issue cost her union votes in the primaries, she became the first Democrat to win the state’s governorship in 22 years, even as many other Democrats struggled in other parts of the country.

2. Pension reform may be off the table in Pennsylvania. Incumbent Republican Governor Tom Corbett had championed pension reform for the last two years, but was unable to pass legislation despite a friendly Republican-controlled legislature. With Democrat Tom Wolf beating Corbett last night, the window for meaningful reform may close. The state still faces rising costs from its pension debt and a retirement structure that disadvantages the vast majority of the workforce, but Wolf has shown no interest in tackling those issues. 

3. Pension reform isn’t done in Illinois. Bruce Rauner, the state’s newly elected Republican governor, made reforming the state’s under-funded pension system one of his top campaign priorities. We’ll have to wait and see whether Rauner’s support for a defined contribution plan for all new workers is primarily about costs and cutting benefits, or whether he’s willing to craft a well-structured plan that provides retirement security to all workers. If he’s serious about providing secure, portable retirement benefits for all workers, let’s hope he includes Social Security as one part of the solution for Illinois teachers.