Teacher Pensions Blog

President Obama struck at the heart of retirement issues in his final State of the Union address:  workers need portable benefits.  

This may have been the first time a retirement issue was quoted as one of the best lines from the President’s speech:   

“ We also need benefits and protections that provide a basic measure of security. After all, it's not much of a stretch to say that some of the only people in America who are going to work the same job, in the same place, with a health and retirement package, for 30 years, are sitting in this chamber. For everyone else, especially folks in their forties and fifties, saving for retirement or bouncing back from job loss has gotten a lot tougher. Americans understand that at some point in their careers, they may have to retool and retrain. But they shouldn't lose what they've already worked so hard to build…And for Americans short of retirement, basic benefits should be just as mobile as everything else is today.”

President Obama is correct that few workers will stay 30 plus years in one given position and place. And to assume otherwise is almost unreasonable, or at least, highly improbable.  The median U.S. worker has less than five years of experience at his or her current job according to the Bureau of Labor Statistics. And teachers are no exception. 

Teachers, like the rest of the American workforce, have become increasingly mobile over the decades.  If you asked a teacher how many years of experience he or she had two decades ago, the most common answer would have been fourteen or fifteen years. The most common year of experience is now 5 years.

Yet, state pension systems treat teachers as if they were a static workforce. A teacher can’t easily transfer her benefits from one state system to another without paying a high price. To receive full benefits, teachers need to do exactly what Obama pointed out as highly improbable: work the same job, in the same place, for 30 or more years. Social Security is a nationally portable program and alleviates this issue to a certain extent.  But it’s not available to all teachers, causing problematic gaps in coverage.    

Retirement policy is an area ripe for reform, and policymakers are beginning to see this. Obama supported efforts to make military pensions more portable, and he introduced the concept of a "myRA" in 2014’s State of the Union address.  The myRA program, now in full swing, provides portable savings for workers who otherwise don’t have access to a 401k or other retirement plan through their employer. A growing number of states are also considering building on that model and providing similar options in their states.   

While all workers don't yet have fully portable benefits, President Obama has laid the groundwork for moving the country in that direction.