New Pension Plans Provide Educators With Options, Risks

By Julie Blair

Teachers and administrators in 27 states are finally free to ride the nation's bucking financial markets after years of watching from the stands—a trip that is proving both liberating and painful.

Now that many of them have won the freedom to invest their retirement money as they like, this new generation of investors is being subjected to the volatility of the stock market, including its recent dives, along with all the other investors.

"There are macroeconomic changes—war, peace, stagflation, downsizing of the economy—that have tremendous effects on the stock market and people's rates of retirement," said John D. Abraham, the senior associate director of research for the...