Bill would set up riskier 401(k) style plans for new teachers
Passing the Senate Tuesday by a razor-thin margin, HB 1463 would setup a voluntary defined contribution (DC) plan for newly-hired teachers. A member who does not elect to participate in the DC-only plan defaults to the current defined benefit/annuity (DB) hybrid plan.
ISTA opposes DC plans because members would lose significant retirement benefits, per extensive research. A career teacher who elects this DC plan could expect to receive a fraction of benefits expected under the DB hybrid plan.
HB 1463 was heard in the Senate Pension and Labor Committee last week where it was amended, mostly for the worse. PERF and TRF members will now no longer have 36 months to opt out of the DC plan. Instead, their initial decision on which plan they choose would be irrevocable.
ISTA would like to thank the 24 senators who voted “no” on HB 1463. If your senator voted “no,” please offer thanks as well.
The bill now goes back to the House to accept the Senate’s changes, or move the bill to a conference committee.