As urban legend has it, a Harvard Law School dean walked into an orientation for incoming students and told them to, “Look to your left and then look to your right, because one of you won’t be here by the end of the year.” School administrators should be providing similar warnings to new teachers. They should say, “Look at the person next to you. One of you won’t receive a pension. You’ll leave your service here without any employer-provided retirement benefits. Better start saving.”

As I write in a new piece for the Detroit News, high mobility rates and a 10-year service requirement for teachers to qualify for a pension ensure that less than half of Michigan’s new teachers will remain long enough to earn a pension. Additionally, Michigan does not allow a teacher who leaves before 10 years to receive any of their employer’s contribution. Teachers leaving before then will forfeit the entirety of 16.8 percent of salary that employers contributed on their behalf. This adds up to a significant savings penalty for individual teachers: A hypothetical Michigan teacher earning $40,000 a year would forfeit $7,266 if she leaves after one year or $90,738 if she leaves after nine years.

Teachers should be warned about the savings penalty in their states. Read the full piece here.

– Chad Aldeman

This first appeared on teacherpensions.org