IRTA Newsletter – March 23, 2017

HB 1463 “Defined Contribution Option Plan” passed out of the Senate Labor and Pension Committee on Wednesday, March 22nd with a vote of 6-3 party line vote. IRTA along with 3 other groups testified strongly against the bill and no one testified in favor of the bill. To make matters worse the bill was amended to make it a poorer option for future educators in committee.

We are reaching out to other Public Pensions groups to call and to testify against this bill.

We again reach out to you to call/email your Senator and tell them to vote “NO” on HB 1463. The reasons are many and will be included along with a list of Senators. This is the last chance to stop this bill. Make your contacts by phone or email before Tuesday noon.

Indiana’s Hybrid Plan for educators already offers a pension and an annuity option. Educators receive their pension and can either tie their annuity investment into their pension payment, leave their annuity alone with INPRS, or pull their annuity and put into another private savings plan when they retire.

At today’s flat lined salaries, our future educators will not be able to save enough to have a secure retirement. Financial studies show that they would need to save over $600,000 to replace their pension benefit. Many young educators are coming out of college with large college loan debt, they are not able to save adequately for their future retirement.

Think what would have happened to you in 2008 if all you had was an annuity account. How much would that have reduced your retirement fund? Share your stories on how the recession effected your investments and retirement options.

Other reasons we are against Defined Contribution Plans:

• Does not guarantee retirement income will last through retirement
• Dramatic fluctuations in account value with stock market downturns
• DB plans provide same benefit at half the cost
• DC plans have higher fees
• No one has requested this option or testified in favor for 2 years
• Firemen, police and state police are not asking for this option or being pushed into it
• New educators are not ready or have information to make the decision when they are hired

Our present retirement plan allows for a secure and modest retirement. It is a better recruitment tool for future educators than having a DC plan. We are trying to recruit and retain educators in this time of shortages, not encourage them to leave by taking the money and run.

Senators Call: 1-800-382-9467 or 1-317-232-9400

Click here to find your State Senator

Please feel free to share this message with active teachers and any future educator that you know.
Thank you for your interest and support of our legislative efforts.

Tom Mellish
Executive Director