There must be many state policymakers across the land who feel trapped between the fiscal reality that their teacher retirement systems are teetering under huge deficits that only continue to grow and the political perception that teachers are determined to keep their defined benefit pensions.
But is that really how all teachers feel? A new study from Dan Goldhaber and Cyrus Grout adds to the growing evidence that many teachers are quite open to other types of pension plans. Goldhaber and Grout look at data from Washington state, where teachers have been able to choose between a traditional defined benefit plan and a hybrid plan that combines a defined benefit component with a defined contribution component.
The study looks at two cohorts of teachers. In the first cohort, 75 percent of teachers elected to move from the DB plan to the hybrid. Some context is required, though; the state offered a significant financial incentive in the form of a transfer bonus. But the study looks at a second cohort of teachers: new teachers who have had to choose between the two plans since 2007, without any incentives on the table. A full 60 percent of these teachers--52 percent by election, the rest by default--are in the hybrid plan.
So take heed and take heart, state policymakers. Teachers are more open to these changes than you think. And there's more: Goldhaber and Grout found some evidence that the more effective teachers were more likely to pick the hybrid plan.