ST. PAUL — Educators from across Minnesota rallied Monday to draw attention to what they consider an unfair pension system for K-12 public school teachers.
At a “Better Pensions Now” rally in the Capitol rotunda, several hundred people called for changes to a retirement plan in which nearly every public school teacher in the state is enrolled.
“In 1989, the state of Minnesota created a two-tiered system for pensions and, now, 30-some years later ... people who have been in education are realizing that there’s not a lot of equality in those systems, and that we do need to try and do better to create a fair system for pensions,” Jim Olson, a teacher at Myers-Wilkins Elementary School in Duluth, told the Duluth News Tribune as he headed to Monday’s rally.
That tiered system is the result of a plan approved by state lawmakers that means teachers who were first hired before July 1, 1989, can retire after they turn 65 or if their combined age and years of service total 90. A teacher hired before that cutoff could theoretically retire under that “Rule of 90” when they’re 56 with 34 years of service.
Teachers hired after July 1, 1989, are in the “Tier II” system. They can only retire with full benefits once they are 66 years old.
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Only about 5% of teachers in Minnesota are in the older, “Tier I” system.
The penalties for retiring early under the newer system are also much steeper.
A Tier I teacher could retire early and only lose 3% of their retirement benefits for each year they were short of 65, up to a maximum of a 30% reduction if they retired at 55. A Tier II teacher stands to lose 4%-7% of their retirement benefits for each year they’re short of the threshold of 66.
Sheila Fitzgerald, a retired Eden Prairie teacher who did so under the Rule of 90, told ralliers Monday it’s demonstrably unfair she was eligible for something they don’t get.
“I can clearly see how it’s hurting the profession I love,” Fitzgerald said.
Deb Munter, who teaches fifth grade at Spring Lake Park Schools, said she’s being penalized for choosing to teach in the state with a Tier II pension plan. It’s frustrating, Munter said, to see co-workers retire with better benefits while she has to work 10 more years for the same.
Staff at Education Minnesota, the statewide teachers union that organized the rally, held up HF 2222 , a bill in the state Legislature that would allow teachers to retire with full benefits when they reached age 62 or when they had accrued 35 years of service.
“It would make the benefits better and more competitive with others,” Adam Janiak, an Education Minnesota negotiations specialist, said Monday. “That is the ultimate goal and the bill we pushed and worked with legislators to get passed.”
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Janiak and other union staff hope changes like those can help recruit new teachers to the profession or entice existing teachers to stay if they’re on the fence.
“What we’re seeing is people in their 30s, 40s and 50s leaving the profession,” Janiak said. “If we can make not only their benefits better, and their compensation better … they will be more likely to stay in. That will retain those folks.”
Olson said HF 2222 is the “gold standard,” but was quick to note that problems with the statewide pension plan are bigger than a single piece of legislation. Reductions in mandatory employer contributions since the late 1990s, he claimed, have left it underfunded.
“You can’t just catch up overnight,” Olson said.
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