March 2019

For most teachers, vesting periods are largely symbolic. Merely vesting in a pension plan is not sufficient to guarantee a decent benefit, and many teachers would be better off withdrawing their contributions than waiting to collect a pension.
Do teacher pension plans provide their members an "adequate" retirement benefit? This paper finds that the typical teacher pension plan leaves 80 percent of new, young teachers with inadequate benefits. In contrast, cost-neutral alternative plan designs could do a better job of providing all teachers with adequate retirement savings.