We searched public pension plan documents to find what happens when teachers leave a pension plan. Although this this information is limited, some teachers prefer to cash out and take a lump-sum payment rather than waiting to draw a pension in retirement.
States have attempted to ameliorate the non-portability of pensions by “selling” service credit. Unfortunately, though, pension plans exact transaction costs on mobile teachers that significantly hamper their savings.
Michigan’s retention rates are actually higher than they used to be. Fifteen years ago, even fewer Michigan teachers stayed in the classroom than they do today.
