Teacher Pensions Blog

  • Teacher experience levels can vary dramatically state-to-state, but experience levels vary even more within states.

    To show what this looks like, I’ve analyzed a dataset from the state of Maryland showing how experience levels vary by district. Data collected in the fall of 2011 found that, on average, 31% of all Maryland public school teachers had zero to five years of teaching experience. Another 24% had six to ten years of experience, 28% had 11 to 20 years, and only 18% had been in the classroom more than 20 years.

     

    Some district workforces look very different from the state average, however. In Prince George’s County, for example, 42% of teachers had been working less than six years, with numbers in Charles County and Baltimore City County hovering near 40%. At the SEED school, a tuition-free public boarding school founded in 2008, nearly half its instructional staff was relatively new to the profession.

    Other counties had much more experienced workforces. In Calvert County, for example, just 10% of teachers had five or fewer years of experience, and more than 60 percent of its teachers had 20 or more years of experience. Calvert County, a growing exurb south of Washington, D.C., has a median household income of $87,449, placing it amongst the top 20 wealthiest U.S. counties. Calvert joins Garrett, Allegany, Carroll, Worcester, Frederick, St. Mary’s, Montgomery and Harford, all districts where 50% or more of their teacher workforce has at least 11 years of experience.

    These numbers reflect the range of challenges different districts face. Counties like Prince George’s, Charles, and Baltimore City employ much more mobile workforces, and thus spend more time and resources recruiting and training new teachers than Allegany, Garrett, and Calvert counties. Similarly, pension plans play out very differently amongst these two types of districts. Those with a more stable workforce are likely to reap larger benefits from the pension system, while districts with greater teacher turnover are likely to subsidize the pensions of everyone else.

    A district’s teacher experience breakdown can reveal information about wide-reaching disparities, whether they be teacher turnover, resource allotment, or pension savings. Years of experience continues to persist as a key variable in teacher pension formulas, as well as salary negotiations. A revolving door of short- term teachers in some districts can end up padding the retirement benefits of others.

  • There’s a lot of misinformation circulating around pensions. To cut through the noise, the National Council on Teacher Quality (NCTQ) and StudentsFirst released a new fact sheet that debunks the most common pension myths. Here are some highlights that the paper addresses:    

    • Mythbuster #1. While many assume that traditional pension plans provide all teachers with a secure retirement, the reality is only 20 percent of new teachers are estimated to stay in a single system long enough to earn full benefits. Even teachers who work a full career, but who move accross states, face steep penalities. 
    • Mythbuster #3. While there is the risk of investment loss in 401ks, traditional defined benefit pensions aren’t without risk. Teachers face attrition risk—or the risk that a teacher will leave before receiving adequate retirement benefits—when they enter into their state or local plan. Life's planned and unplanned events make the odds of staying in a single system slim.  
    • Mythbuster #5. The pension vs. 401k debate creates a false binary. Defined contributions or 401k-type plans aren’t the only alternative to traditional defined benefit plans. Other alternatives exist such as a cash balance or hybrid plans can offer teachers more secure and portable benefits.

    Check out the full fact sheet to read about all eight pension myths and what the data and research really say. 

  • The Louisiana Legislature recently agreed to a 1.5 percent cost-of-living adjustment (COLA), meaning that retirees will see a small boost in their pension payments.* In Louisiana, like most other states, cost-of-living adjustments are a way for state pension plans to offer retiree benefits that are adjusted for inflation and are usually determined by the state legislature. Louisiana previously linked their pension plan’s COLAs to just changes in the Consumer Price Index (CPI), but now also tie COLAs to investment gains so the amount they adjust for is subject to change according to the plan’s funding levels. COLAs, like pension benefits themselves, are entangled in the political process, and so retirees must rely on the legislature to get their benefits. 

    While the formulas used to determine public sector pensions have ironclad legal protections—protecting past and sometimes even future benefit accruals—COLAs face less scrutiny. The Center for Retirement Research reports that 17 states reduced, suspended, or eliminated their COLAs from 2010 to 2014. While most of the cuts were challenged, the courts upheld 10 of the 12 cuts (except in Illinois and New Jersey, where the case is still pending in a lower court but a COLA freeze remains).

    But compared to the uncertainty around public pension COLAs, Social Security benefits automatically adjust for inflation. While debates rage on what measure of the CPI to use, the fact is that Social Security benefits are automatically adjusted each year. Unlike in state pension plans, workers don’t need to worry about the value of their Social Security benefits eroding over time. Today, six teacher pension plans offer COLAs less than the change in CPI (when it's positive) or have eliminated COLAs altogether. Another 12 teacher pension plans are left to the ad hoc decision-making of their state legislatures or are based on investment returns.

    This is bad news for public workers who don’t participate in Social Security. Teachers in Louisiana may get a temporary win with their new COLA, but overall, they lose out because Louisiana teachers and other public sector workers aren’t covered by Social Security. Instead, they’ll have to hope that investment gains improve in order to see any further increases. Similarly, states with ad hoc increases will have to depend upon their legislatures to approve adequate adjustments from year to year. States without coverage historically banked on their pension systems to Social Security, but that wager carries more risk. 

    *Update: Governor Bobby Jindal vetoed the COLA bill, so Louisiana’s retirees will not receive an increase to their pensions.  Instead, the 1.5 boost will go into effect next year, unless other legislative changes are made and/or funding levels and investment gains change.  

  • How many teachers retire each year? That may sound like an easy question to answer (especially for a website called TeacherPensions.org), but it's not quite so easy once you start digging into the numbers. 

    There's no national dataset that collects annual data on teacher retirements. The most recent data on retirement from National Center for Education Statistics' Schools and Staffing Survey (SASS) estimated that 269,800 teachers left the classroom in the 2008-9 school year and 27.8 percent of them retired. That gives us a total of 75,004 public school teachers who retired that year, or about 2.2 percent of the 3.4 million teachers nationwide.  

    But retirement rates can change. The state of the broader economy, changes in pension plan provisions, working conditions at schools, and personal factors all play a role in teacher retirement decisions. The 2004-5 SASS found that 39.2 percent of teachers who left the profession did so for retirement. That would put the national retirement rate in 2004-5 at 3.3 percent of all public school teachers. By these back-of-the-envelope calculations, the retirement rate of public school teachers seems to have fallen almost 50 percent from 2004-5 to the depths of the 2007-9 recession.

    Another way to find an answer to this question is to look at data from state pension plans. Each year, some number of workers retire and begin receiving annual pension payments. The Boston College Center for Retirement Research has data going back more than a decade on the total number of these "annuitants" in each state pension plan. But those figures are a function of the number of new annuitants, minus any beneficiaries who pass away. They don't give us a perfectly accurate number of new retirees. 

    We can turn to individual state pension plans to find more data. Pension plans typically report how many workers retire each year, as well as their average pension. We could find the teacher pension plan in each state and dig out this information. But there are issues here as well. Because teachers are typically enrolled in pension plans with all education workers, including principals, school support staff, and district personnel, the plan's new retirees would include more than just teachers. (Some states put teachers into pension plans with other state workers, college and university employees, or other public employees. The numbers would be even more distorted in those states.)  

    We'll be doing more research on this going forward. In the meantime, use the SASS data for national estimates or look to state pension plans, with the above caveats in mind. 

  • New Jersey teachers are furious. Last week, the state Supreme Court made a surprising decision, allowing Governor Chris Christie to skip payments that he promised just a few years ago. In one New Jersey county, public school teachers are protesting with a “black-out,” wearing signs showing the number of pension payments they have made over their teaching years. Teachers are wearing signs with varying numbers—20, 160, 260, 552, 780—representing their individual payments as well as their differing years of experience. 

    New Jersey teachers have every right to be upset. After all, the Governor proclaimed in 2011 that his signature bipartisan pension reform would “bring an end [to] years of broken promises”—only to later break his own promise.

    But these teachers could just as easily protest their shortchanged benefits. A teacher with 20 contribution payments, has about a year’s worth of teaching (assuming two monthly payments, or 24 per year) and isn’t going to qualify for a pension for another 216 payments or 9 years. Similarly, a teacher with 160 payments, or almost seven years of teaching, won’t qualify for a pension for another 96 payments. This is because the state requires a 10-year minimum vesting or service requirement (a practice that would be illegal in the private sector, where plans are federally regulated).

    Neither of the above teachers actually have a pension yet, even though they’re contributing toward it, and close to half of the state’s new teachers won’t qualify for a minimum pension according to plan assumptions. But even teachers who have made over 260 payments, or who have about 11 years of teaching, are just about to accrue pension benefits and will most likely also leave shortchanged. In many cases, teachers will actually end up paying out more towards the system in contributions plus interest than what they will get back in benefits—basically losing money—according to research from the Urban Institute. Because pensions accrue wealth unevenly and primarily at the back end, teachers who stay less than a full career will accrue minimal benefits, often with a negative net return.

    While Governor Christie has shortchanged the pension fund, the system itself is shortchanging the majority of New Jersey teachers. Unfortunately, because of the lack of transparency and byzantine nature of pension systems, many teachers may not realize this.

  • We tend to talk about teacher retention as a national problem. The stat that “half of all teachers leave within 5 years” may have seeped into public consciousness, but it’s not true today and was never quite right anyway.

    We also intuitively understand that teacher retention varies across districts and schools. We need to spend more time grappling with the consequences of those variations—teacher turnover affects everything from student learning to teacher retirement savings—but we also need to spend more time quantifying where it exists and what it looks like.

    To see how much teacher experience levels vary across states, I ran the table below from NCES’ Schools and Staffing Survey. Each column shows the percentage of the state’s teacher workforce falling into various bands based on the number of years they had served in public schools. The data come from the 2011-12 survey administration, so they represent each state’s teaching workforce in that particular school year.

    Nationally, 23.6 percent of the nation’s public school teachers had five or fewer years of experience. The largest category was teachers with 11-20 years of experience; slightly less than one-third of all public school teachers fell into that group. Fourteen percent of teachers had 21-30 years of experience, and another 5.7 percent had 31 or more years of experience.

    Although state totals tended to cluster around the national averages, there are some extreme outliers on either end. Delaware, Louisiana, Alaska, Mississippi, Maryland, Arizona, the District of Columbia, Utah, and Hawaii all had comparatively inexperienced workforces. On the other end, Montana, Vermont, Indiana, Iowa, Maine, North Dakota, Wyoming, and South Dakota had relatively more experienced teachers. Other states, like Rhode Island and Nevada, had higher concentrations of teachers in that middle band of experience, meaning they had comparatively few newcomers and few long-term veterans.

     

    Percentage of Teachers By Experience Levels (full-time, public schools only)

    State

    5 years or less

    6-10 years

    11-20 years

    21-30 years

    31 or more years

    Alabama

    19.5

    25.4

    33.7

    16.0

    5.5

    Alaska

    30.2

    19.6

    33.5

    11.9

    4.8*

    Arizona

    32.7

    25.7

    25.2

    12.5

    3.8*

    Arkansas

    26.2

    18.3

    29.3

    15.7

    10.4

    California

    19.6

    24.6

    37.3

    13.0

    5.5

    Colorado

    27.0

    25.8

    35.5

    8.2

    3.5*

    Connecticut

    21.5

    22.5

    34.0

    12.9

    9.1*

    Delaware

    30.0

    23.3

    28.7

    13.5

    4.4*

    District of Columbia

    34.8

    25.4

    23.7

    9.8*

    6.4*

    Florida

    25.8

    26.7

    28.0

    14.9

    4.6

    Georgia

    19.4

    26.5

    35.5

    14.2

    4.3

    Hawaii

    43.0

    29.1*

    15.4*

    10.5*

    2.0*

    Idaho

    25.2

    20.1

    31.6

    17.9

    5.2*

    Illinois

    25.9

    25.7

    30.1

    13.5

    4.8

    Indiana

    24.3

    16.4

    31.4

    14.9

    12.9

    Iowa

    20.3

    21.5

    29.8

    17.3

    11.1

    Kansas

    26.2

    18.8

    28.2

    18.9

    7.9

    Kentucky

    24.7

    23.3

    34.0

    15.3

    2.7*

    Louisiana

    30.1

    18.3

    27.9

    15.8

    8.0

    Maine

    17.6

    18.9

    33.7

    17.8

    12.0

    Maryland

    32.6

    21.0

    25.4

    14.9

    6.1

    Massachusetts

    26.5

    25.7

    31.0

    11.7

    5.0*

    Michigan

    18.9

    25.6

    38.1

    13.9

    3.6

    Minnesota

    21.2

    21.3

    36.1

    15.4

    6.0

    Mississippi

    30.2

    25.3

    27.5

    12.7

    4.3*

    Missouri

    27.2

    25.9

    29.0

    14.0

    3.9

    Montana

    25.5

    19.4

    27.7

    16.8

    10.6

    Nebraska

    24.0

    17.8

    31.7

    16.4

    10.0

    Nevada

    17.6

    30.7

    36.1

    12.4

    3.2*

    New Hampshire

    22.0

    26.1

    27.7

    15.6

    8.6

    New Jersey

    23.3

    24.8

    33.8

    13.6

    4.5

    New Mexico

    21.6

    24.0

    33.8

    16.2*

    4.3

    New York

    16.5

    26.4

    38.9

    14.3

    3.8

    North Carolina

    24.8

    24.8

    31.1

    16.1

    3.2*

    North Dakota

    24.8

    16.0

    28.0

    20.6

    10.6

    Ohio

    19.6

    21.3

    37.0

    15.4

    6.7

    Oklahoma

    25.2

    17.6

    33.7

    16.1

    7.3

    Oregon

    23.0

    28.7

    29.5

    15.4

    3.5*

    Pennsylvania

    22.4

    26.0

    32.1

    13.1

    6.3

    Rhode Island

    18.6

    27.5

    39.1

    13.5

    1.4*

    South Carolina

    21.0

    23.1

    28.8

    16.8

    10.3

    South Dakota

    21.7

    14.5

    31.7

    20.6

    11.5

    Tennessee

    28.9

    20.6

    29.6

    15.1

    5.7

    Texas

    26.6

    27.8

    26.6

    13.9

    5.0

    Utah

    36.6

    24.2

    20.1

    13.4

    5.7*

    Vermont

    23.2

    16.3

    33.0

    18.2

    9.4

    Virginia

    22.4

    25.6

    28.0

    15.7

    8.3

    Washington

    21.4

    21.9

    30.3

    18.8

    7.6

    West Virginia

    27.8

    20.2

    25.7

    18.9

    7.4

    Wisconsin

    24.3

    19.2

    37.2

    14.3

    5.0

    Wyoming

    21.3

    16.1

    30.9

    17.0

    14.6

    National Average

    23.6

    24.3

    32.0

    14.4

    5.7

    *Interpret with caution. Sample size is too small to provide stable estimates.

    To be clear, these results are not just about teacher retention rates. They also reflect hiring trends. States that hire more teachers than they lose through attrition will tend to have a less experienced workforce, even if their retention rates for individual teachers stay the same. (This is a big part of the why the national teacher workforce has changed so dramatically. As districts cut pupil/teacher ratios from almost 19:1 in the early 1980s down to almost 16:1 today, they hired many more teachers than they lost. By making the choice for lower pupil/ teacher ratios and class sizes, it was inevitable that we’d end up with a less-experienced workforce.) I’ll come back to this distinction in subsequent posts.

    These figures are merely a snapshot in time and do not indicate how each state’s workforce is changing over time. But the data suggest that some states should be investing much more heavily in teacher recruitment and retention efforts, while other states may have a harder time dealing with the coming retirements of the Baby Boomer generation.

    Policymakers would be wise to consult this sort of data to set priorities within their states or school districts. While we tend to talk about the “teaching profession” as monolithic, there are significant differences across and within states.