Why Some Teachers Prefer a 401(k) Over a Pension

n 2012, the Michigan Legislature passed a bill that kept open the teacher pension system but began allowing school employees to choose a 401(k)-type defined contribution retirement account.
Since then, around 18,000 school employees have chosen the 401(k) instead of the old pension system, according to a FOIA request. Their reasons for making the switch range from concerns about future pension cuts and underfunding to wanting more control over retirement funds.

“I chose the defined contribution option for a number of reasons. One of which … [is] the pension program is underfunded and may or may not be existent when it comes my time to collect,” said Adam Hastings, a math teacher at Athens High School. “ I also was told that the 401(k)-type option was more portable under the circumstance that I should decide to move to another state.”

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See also part II...

Fears About State Pension Underfunding Drive School Employees to Other Options