Earlier this week I had the chance to testify in front of a joint committee of the Arkansas State Legislature focused on Public Retirement and Social Security Programs. I used the opportunity to show that Arkansas' current plan offers solid benefits to long-serving veteran teachers, but it can leave 5-, 10-, or even 20-year veterans with insufficient benefits. My full presentation is below.
After defining an "adequate" savings threshold, I compare it to the current Arkansas Teacher Retirement System (ATRS) plan, as well as two other types of plans, a defined contribution plan currently offered to employees at the University of Arkansas and a cash balance plan currently offered to retirees in the ATRS system. As I show in the slides, the current ATRS plan has sufficient contributions going into it, and it does provide adequate benefits to workers who stay in the system for their full career, but that leaves many public school teachers without adequate retirement savings. The majority of Arkansas teachers will need to make up the gap somehow, by saving more in other jobs, working longer, or suffering from a less-than-adequate retirement. In contrast, other types of plans could provide more Arkansas public school teachers with adequate retirement savings regardless of how long they stay.
I also urged Arkansas legislators to focus on questions of benefit adequacy rather than concerns about the plan's effects on teacher recruitment or retention. As we've written before, retirement plans appear to be a poor tool to shape the workforce, and other factors are far more important for how teachers make decisions about whether to enter or remain in the teaching profession. As a result, state leaders should prioritize how well their retirement benefits are meeting the needs of workers. The teaching profession is too large, and too important, to leave without adequate retirement benefits. Click through my full presentation on Arkansas below: