Missouri insulated from nationwide teacher shortage by pension program
COLUMBIA - In an age where a nationwide teacher shortage is well-documented, many believe Missouri’s public school teacher retirement benefits have become quite the draw.
But, others are drawing a target on the system.
Kathy Steinhoff, a Hickman High School math teacher, who has been in the district for 28 years said, “It is the best kept secret even within the profession because, for most teachers, it doesn’t come on their radar until they’re teaching for about 25 years.”
Steve Yoakum, Executive Director for The Public School Retirement System of Missouri or PSRS, said other states are certainly paying attention.
"Other states sometimes don’t have plans as well-funded, as well-designed as ours. The Kansas plan provides lower benefits than ours does and it allows Missouri to recruit teachers out of Kansas. And, Illinois teachers’ plan is in very bad condition.”
PSRS said as many as two-thirds of the rest of the states look at the Missouri model as a way to do it right.
Yoakum said, “When other states look at Missouri and look at our structure, they are very envious.”
Kathy Steinhoff has been a math teacher in the Columbia Public Schools system her entire career, and that’s exactly the goal.
Yoakum said, “From the employer standpoint, it does provide golden handcuffs to a certain extent. When a teacher has accumulated a certain years of service, it’s very hard for them to leave. This helps our school districts retain those very good teachers.”
Show-Me Institute, a think tank that leans more toward a 401k plan for teachers, thinks the pension actually detracts teachers from staying in the profession in Missouri.
Michael McShane, the Director of Education Policy for the institute, said, “We just see some flaws that kind of exist in the current system that need to get fixed.”
McShane quoted a study that said only 35 percent of Missouri teachers will teach long enough to get all or more money in retirement benefits than they put in.
He also said, “So, what we’re saying is something like 65 percent of our teachers will pay more into the system than will get in benefits and I think that’s a problem. There’s ways to structure a really strong retirement package that would follow teachers even if they only teach 10 years or 4 years. ”
The current system hasn’t detracted Steinhoff from sticking it out in Columbia.
She said, “I could probably get full retirement in two years. It’s nice to know that’s there to support me for all the support I’ve given kids over the years.”
According to Yoakum, “The retirement system is designed to provide a career employee in Missouri schools with roughly the same standard of living they had. About 75 percent of their take-home.”
Here’s how it works: teachers contribute 14.5 percent of their paycheck, the school district matches that. The rest comes from investment earnings, which accounts for about 63 percent of their retirement payments.
It’s a defined benefit plan that’s been in place since 1946 -- originally created as an independent trust fund.
“Corporations have gotten out of the retirement business and shifted that responsibility over to the individuals and as we’ve seen from the numbers, it’s failed miserably,” said Yoakum.
A resounding opinion we heard from teachers and administrators in the public school system was Show-Me Institute doesn’t care about public school kids.
McShane responded by saying, “See, I think the person you talked to… I think they do care about school teachers and kids so it’s odd the same courtesy isn’t afforded back to me.”
Regardless of the intent, Steinhoff vehemently disagrees with Show-Me Institute’s stance on Missouri’s retirement payments.
“They also do not support public education. So, it’s just an extension of them not supporting public education, in my opinion. I think a good question is -- how is that good for kids? If it hurts the people who are taking care of our kids, then in my opinion, it hurts our kids,” said Steinhoff.
PSRS covers all of the teachers in the state except Kansas City and St. Louis, which is 537 school districts.
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