LOS ANGELES, CA (Catholic Online) - Public state and local pensions nationwide have grown increasingly endangered due to state shortfalls. Teacher pensions have been included in a more than $660 billion shortfall in what's been put aside for such retirement benefits and what is owed. Many states offer separate pension plans for teachers, while others include them in broader plans that cover other government workers.

This issue is reflecting what is currently ongoing within private industry. Companies have been abandoning traditional benefits due to the cost and the risk and replacing them with 401(k) type plans, which are more portable - but are far riskier to the worker.

The issue of teachers' pensions takes on special significance due to it impact on school children. Pension policies affect the ability of districts to hire and retain teachers, and funds used to shore up pension funds usually mean tax hikes or come at the expense of other areas like education.

The economic downturn has helped fueled the pensions shortfalls. States in better economic times expanded benefits that are currently are difficult to pay for and sometimes opted not to make payments into the systems.

In California, where the teacher pension fund has more than $50 billion in unfunded liabilities, Gov. Jerry Brown has presented a pension-reform plan that would increase the retirement age for new, non-public safety employees such as teachers to 67 years of age.

The plan would also require employees to contribute to at least 50 percent of their retirement costs and move new public employees into a hybrid plan that blends a traditional pension with 401(k)-style program.

Teacher unions oppose many of these efforts, especially proposals to move from defined benefit pensions to the 401(k)-style plans. The unions say shortfalls are exaggerated by critics with an ideological agenda and that the pensions are an important part of compensation for a well-educated population that's underpaid.

Unions also argue that defined benefit plans are a recruitment tool that helps districts attract good teachers and maintain a stable work force.

Teachers' unions also contend that states might not realize the savings they expect by shifting to a 401(k)-style plan. They point to Alaska, where the legislature in 2005 took the state from a defined benefit program to defined contribution. The projected savings have not yet been brought to fruition, and the state has seen its unfunded pension liability rise to an obligation estimated at about $11 billion.

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