The Long And Costly Road
Janet Geiger is one teacher who knows all too well how much moving from Michigan to Fairfax County, Va., cost her: for starters, about $15,000 a year.
"I taught for 15 years in Michigan,'' says the elementary school teacher. "Had I stayed, I'd be at the top of the salary scale, making $15,000 a year more than I am now. As it is, they only gave me credit for five years of experience when I moved, and so I'm way down on the salary schedule.''
Although not universal, the policy of not giving full credit on the pay scale or pension plan for every year of experience on a teacher's resume is widespread. Usually, it is a result of cold, hard economics.
"When teachers move, no one particularly cares about what happens to them,'' says Chris Pipho, director of research for the Education Commission of the States. "It's strictly dollars and cents. It's much cheaper to hire someone with fewer years of experience.'' But veteran teachers are a valued commodity. So, to afford them, districts devalue experienced teachers on paper--giving them credit for only a portion of their years of experience-- and then hire them for considerably less than they were earning elsewhere. While this helps a school board balance a tight budget, it often causes real financial hardship for teachers and their families, who may have to learn to live on less than they are accustomed to. Only if salaries are significantly higher in the new state, and credit is given for most or all of a teacher's experience, will he or she be able to break even or come out ahead.
The procedure for determining how much credit a teacher will receive for past experience varies from district to district. In some systems, it can even vary by job candidate.
"We don't allow individual candidates to bargain for more experience credit, but the school board will grant more to someone we really need and/ or want, especially in areas of critical shortage,'' says Tom Timmis, personnel director at New Trier Township High School in Winnetka, Ill.
In the Los Angeles Unified School District, the credit setback can be merely temporary. Most of the teachers who move to the district from out of state have not completed the requirements for a California teaching license. When the district initially rates these people, it typically limits them to two years of experience on the salary scale, says Jan Burden, supervisor of salary allocation for the Los Angeles schools. "But when the teacher satisfies all the state requirements,'' she adds, "we re-rate her by adding up all her experience and course work within the last 15 years.''
Howard Harms considers himself a lucky man. The 38-year-old social studies teacher has moved twice during his teaching career and has managed to keep his rightful place as a 15-year veteran on the salary schedule. Careful research for one of his moves helped him avoid a financial land mine. "I had interviews with about 16 schools, and contacted 20 or 30 others by phone,'' he says. Few offered him full credit on the salary schedule for his 11 years of experience. "Most had a maximum of eight years that they'd grant,'' he explains. "Or they had a formula, where they'd give a teacher credit for half his years and then a third of however many were left.'' The Minnesota district he had his heart set on offered him a salary that was $9,000 short of what he was earning at the time. Disheartened, he turned it down. Eventually, he found a district-- the Iowa City Community Schools-- that offered him salary credit for all 11 years.
While retaining credit for experience can be a hit-or-miss proposition when you move, holding on to tenure is not. "It's gone the minute you leave a position, even if you're only moving five miles away,'' explains Debbie Scott, assistant director of media relations for the New Jersey Education Association. This contrasts with tenure policies at the university level, where a professor with tenure is often offered it at his or her new institution as part of the employment package.
For teachers, tenure is a valuable career asset. "It offers some very important protections,'' Scott notes. When a teacher comes under the cloud of a child abuse allegation, for example, "the administration gets you out of the classroom, away from the sensitive situation,'' she says. "Without tenure, you could be fired. But with it, they must put you in a nonclassroom setting and keep paying you.'' She also notes that tenure and seniority, another asset that teachers forfeit when they move, shield teachers from unwanted staff shuffling. When a school needs to reduce its teaching staff, the first to be transferred or laid off are nontenured teachers with little seniority. Many districts grant teachers tenure after they have taught several years in the system.
Fulfilling the certification requirements of a new state can also be an expensive undertaking. Newcomers are often greeted with the news that they are no longer "officially'' qualified to teach the very subject they've been teaching for their entire career because the new state's prerequisites are different. When this happens, a provisional license (which can take state bureaucrats months to process) is typically issued to cover the teacher while deficiencies are made up. These "deficiencies'' may include extra hours of credit in the teacher's specialty area or a course on the history of the state. Whether a teacher is shy one course or three, in most cases, he or she is not reimbursed for the tuition.
When Tom Senior's wife, a biomedical researcher, was transferred to Illinois, the 42-year-old science teacher signed on at New Trier in Winnetka. He found it "irksome'' that he needed to take (and pay for) a competency test and six to eight semester hours of course work. In addition, he had to take a class called "Illinois and the U.S. Constitution,'' which, he says, "cost me nothing but time and a moderate amount of boredom.'' The district has worked out an arrangement with several local community colleges for course discounts, but if Senior can't take the classes within a specified period of time, he will have to pay for them out of his own pocket.
(Relocating teachers may find themselves baffled when it comes to figuring out the new state's certification requirements. The state's licensing agency and some district officials can help teachers find out what, if anything, they must do to be certified. For more information on certification, see "How To Avoid Getting Trapped In License Hell,'' Teacher Magazine, April 1990.)
Because his wife has a higher salary and excellent company benefits, Senior isn't concerned about the effect moving has had on his pension. In that, however, he is the exception.
For teachers, the absence of pension portability--the ability to change jobs and retirement systems without losing pension benefits--can mean the loss of thousands of retirement dollars. Pension expert Bernard Jump, associate dean of the Maxwell School of Citizenship and Public Affairs at Syracuse University, estimates that a teacher who puts in five years in one state and 30 in another will receive 11 percent less in annual retirement income than one who teaches 35 years in one state. Longer stints in two states take an even bigger toll: For example, spending 20 years in one state and then 15 in another will cause a 30 percent loss, even if both states have identical pension plan formulas.
With scores of different types of retirement systems in use nationwide, it's difficult to pinpoint the exact way a relocating teacher might lose benefits. Commonly, teachers must participate in a pension plan for a "vesting period,'' which may be as long as 10 years. Teachers who leave the state before vesting are entitled to their own contributions, but not those made by their employer. In the new state, they must go through another vesting period--in effect, they must start over. Public pension systems can have longer vesting periods than private ones, Jump notes, because they are exempt from federal laws that limit the time it takes to vest.
But teachers who move out of state lose in another way. A teacher's annual retirement income is generally based on the length of time he or she has been in the plan and the salary level attained in the final stage of the career. Typically, the state multiplies the number of years the teacher has taught in the state by the average salary of the last five years of service and then multiplies that by roughly 1.5 percent. So, the longer one is in a plan and the higher one's salary is, the larger the pension payment.
Federal legislation to eliminate these penalties for teachers is introduced regularly, but never gets far. With some areas facing critical teacher shortages and others experiencing enrollment declines, an increasing number of education leaders are urging state policymakers to create pension portability for teachers. The National Governors' Association has conducted a study to determine the extent of the problem. But except for a few states and districts that are considering proposals, there has been little action to date.
Jump believes that "the fairest [system] from the teacher's standpoint'' would be an interstate agreement for the transfer of pension assets without penalty. Such an agreement exists in Canada and is said to work well. Rhode Island is the first state to enact a teacher pension-portability law; Massachusetts and Florida are considering bills. Ronald DiOrio, who was the driving force behind Rhode Island's pioneering plan, predicts that most states will adopt similar laws within 10 years. DiOrio, president of the consulting firm Strategy Corporation, counsels state officials interested in modeling their pension policies after Rhode Island's.
Teachers from that state who are moving to another may take all of the retirement contributions they have accrued with them--provided the state they move to does the same for any of its teachers who move to Rhode Island. Under the plan, Rhode Island would calculate how much pension credit the teacher had earned while working there, and the other state would calculate how much the teacher would have earned under its provisions for the same career span. The smaller of the two amounts is what Rhode Island would transfer to the other state in the teacher's name, and the teacher would be required to make up any deficit. The new state would agree to accept retirement credit for each year the teacher had taught in Rhode Island. The result, in effect, would be the same as if the teacher had remained in one retirement plan for the whole period.
Until other states follow Rhode Island's lead, teachers exiting the state may choose either to withdraw their pension contributions or keep everything in the Rhode Island pension plan in the hope that their new state will eventually adopt the system and invite a transfer of funds.
Until the interstate transfer system becomes more widespread, teachers who relocate may discover that their new state has adopted a few "BandAid'' concessions that will make their move less painful, such as a shorter vesting period and provisions that permit out-of-staters to purchase pension credit. The latter allow teachers to buy a specified number of years of credit in the new state's retirement system (ideally an amount equivalent to what they had accumulated before moving). But that can be expensive. "Imagine a 15-year teacher getting into the new pension plan by purchasing, with her personal assets, the value of 15 years' pension benefits,'' Jump says. "This is a big, big number. Will many teachers be able to afford this? Absolutely not.''
Jump hopes the fact that pension portability "is not terribly sexy in the eyes of the state legislators, especially those in states that are hard-pressed financially,'' will not hamper the progress on pension portability. "It's long overdue,'' he says. "There are too many horror stories out there of people being penalized just for moving.''
Vol. 01, Issue 08, Page 1-24