As UFT members employed by the city Department of Education, it is important to understand the crucial role that pension plans play in attracting and retaining talented educators and other school staff and ensuring financial security in retirement.
The defined-benefit pension that UFT members have access to is the gold standard of retirement plans. This pension guarantees a lifetime annuity of regular payments based on a formula that takes into account your years of service, your salary and your age. Unlike 401(k) plans, defined-benefit pensions are not vulnerable to the ups and downs of the stock market.
When it comes to recruitment, a defined-benefit pension plan can be an effective tool for attracting new educators and other school staff to the field. It provides a tangible benefit that many other industries cannot match, and it can be a deciding factor for many job seekers. A strong pension plan can also help to attract experienced staff who are looking for a stable and secure option for the future.
Once educators are recruited and enter the profession, a defined-benefit pension plan can play a key role in retention. Educators who have a secure retirement plan in place are less likely to leave the profession early or to seek employment in other industries because they need to reach certain age and years-of-service milestones to earn the retirement allowance without penalties. This retention incentive is particularly important for experienced educators who have valuable skills and knowledge to offer students.
In addition to recruitment and retention, a defined-benefit pension plan is vital for retirement security. Many school staff have devoted their careers to public service, and they deserve to have a comfortable and secure retirement. A good pension plan will provide them with a steady income stream, which can help to alleviate the stress and uncertainty that often come with retirement.
Defined-benefit pension plans are important not only for educators, but also for the students they serve. Educators with a stable and secure retirement plan are more likely to be engaged, motivated and fulfilled in their work, which ultimately benefits the students they teach.
This column is compiled by Tom Brown, David Kazansky and Victoria Lee, teacher-members of the NYC Teachers’ Retirement Board.