Teachers identified low salary as the primary factor causing turnover in a survey by the state Education Department.
The minimum salary for entry level teachers is roughly $30,000. Some districts pay new teachers $37,000 annually.
“It does appear to be at this time that low salary is a major contributing factor,” agency spokeswoman, Emily Heatwole said Wednesday to a joint Statehouse committee mulling further changes to the pension plan, which was adjusted by law earlier in 2017.
One teacher implored the committee to retain the defined benefit plan, for fear that abolishing it would deter good teachers from getting into the field.
Jarvis Jackson, a teacher in Richland County and a Winthrop University graduate with more than $60,000 in student loan debt, said he will likely have to get a second job to live above the poverty level upon retirement.
But Rep. Bill Whitmire doesn’t think the pension plan can continue as is. “If we keep going down the path that we are now,” the Walhalla Republican told Jackson, “you may not have a retirement.”
A new law, passed in April, aims to narrow the state’s $22 billion pension debt by lowering the assumed rate of return from 7.5 percent to 7.25 percent. That debt has a mere 50 percent chance of being paid off on time—within 20 years—according to actuaries hired by state retirement officials.
The law also increased employee contribution rates to a capped nine percent, while the taxpayer-funded employer rate is 13.56 percent and is set to increase one percentage point annually until 2023.
While some educators say transitioning the retirement plan to an individual plan—like a 401(k)—would be a deterrent to working for the state, many say low pay is a bigger deterrent.
Education officials are bracing for an exodus from the classroom after one teacher recruitment program expires next year.
That program let teachers and some other state workers return to work while collecting retirement and is considered to be one factor that contributed to the pension shortfall. Many workers under the program also have a $10,000 earnings cap, another factor negatively impacting teacher recruitment, education officials say.
Other agencies are expecting worker shortages, too.
The state has roughly 37,000 full time employees—excluding teachers, employees at colleges and universities, and local government employees. More than 10,000 of them are within five years of retirement eligibility.
Benefits to state workers lag behind other states. That doesn’t help recruitment, officials say. State workers contributed 8.66 percent of their salaries, compared to a national median of 5.98 percent in 2016.
Still, attractive salaries are the primary factor in recruiting state workers, especially young adults, one consultant told the committee.
By the end of his career, a private sector employee will have out-earned his public sector counterpart by $1 million, Neville Kenning said.
And that’s an impediment to millenials—born between 1982 and 2004, roughly—who comprise an increasing percentage of the workforce and who are attracted by compensation.
“Nationwide, we’re not attracting the younger people in state government,” Kenning said. “We can no longer think of millenials as the kids in the office, they are the office.”