Why More Than A Million Teachers Can't Use Social Security : NPR Ed About 40 percent of teachers live in places where their state or local pension is the only safety net they've got.
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Why More Than A Million Teachers Can't Use Social Security

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Why More Than A Million Teachers Can't Use Social Security

Why More Than A Million Teachers Can't Use Social Security

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ARI SHAPIRO, HOST:

In recent weeks, teachers have staged protests in Oklahoma, Arizona, Kentucky and now Colorado. Some are fighting efforts to scale back their pensions. Many states have had underfunded teacher pensions for decades and are now drowning in debt. But as NPR's Cory Turner reports, this pension fight is complicated by one little-known fact - more than a million teachers don't have Social Security to fall back on.

CORY TURNER, BYLINE: To understand why, we need to go back to 1935 and President Franklin Delano Roosevelt.

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FRANKLIN DELANO ROOSEVELT: This Social Security measure gives at least some protection to 30 million of our citizens.

TURNER: But one group was left out of the original Social Security Act - state and local workers. That's because of concerns about whether the federal government could tax state and local governments, says Alicia Munnell, director of the Center for Retirement Research at Boston College.

ALICIA MUNNELL: So in the 1950s, there were amendments to the Social Security Act that allowed governments to enroll their workers.

TURNER: And many did, leading the Social Security Administration to trumpet in this 1952 promotional film...

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UNIDENTIFIED PERSON: Most American families are now able to ensure for themselves an income that is guaranteed for life.

TURNER: Most American families except for a lot of teachers, says Chad Aldeman, editor of teacherpensions.org.

CHAD ALDEMAN: Fifteen states do not offer all of their teachers Social Security coverage. And that means that about 40 percent of the workforce is not covered.

TURNER: In states like California, Colorado, Illinois, Missouri and Texas. Now, the law does require that these places give teachers a pension that is at least as generous, says Andrew Biggs, who studies retirement issues at the American Enterprise Institute.

ANDREW BIGGS: On the whole, teachers who don't get Social Security aren't necessarily disadvantaged if they work a full career and get a full pension.

TURNER: But Biggs says many teachers don't work a full career, and some pension plans take a decade before teachers see any real benefit.

BIGGS: You know, in theory you could work for 10 years as a schoolteacher, come out with very little on the pension end, but also have not earned any credits towards getting Social Security benefits.

TURNER: There's another big risk for teachers who don't get Social Security, even the ones who work a lifetime in the classroom.

MUNNELL: We're kind of worried now.

TURNER: Again, Alicia Munnell of Boston College.

MUNNELL: In some places they're actually going to run out of money.

TURNER: See; many of these non-Social Security states have badly underfunded their pension plans. Exhibit A - Kentucky. There the Republican governor once warned if they don't change anything, the system will fail and most of the people now teaching will never see one cent of a retirement plan. So late last month, in a surprise move, Republicans rushed a pension reform bill through committee. Democrats in the meeting were stunned. Here's State Representative Tom Burch.

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TOM BURCH: We've had three or four ways to raise money for this. You're a bunch of cowards in this group that haven't got the guts to vote.

TURNER: The bill the governor signed scraps the old plan for new teachers. Instead they'll get something in between a pension and a 401(k). It's called a cash balance plan. This kind of plan shifts more risk and uncertainty onto workers in a state where teachers don't have a safety net. Pension experts say this is a real conundrum in many places right now - how to fund pension systems that have been starved for decades without giving teachers a retirement plan that's just not as secure as Social Security. Cory Turner, NPR News, Washington.

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