Teacher Pensions Blog

  • At what age can teachers retire?

    The answer to that question depends on the state, the date the teacher began their employment, their age, and their years of service.

    The table below is intended as a helpful tool for teachers to understand the rules that might affect them. For each state pension plan, the table provides the normal and early retirement ages applicable to teachers based on their hire date and relevant benefit tier.

    Nearly every state has multiple tiers with different benefit rules that depend on the teacher’s start date. For each tier, the plan’s “normal” retirement age reflects the point at which the teacher can retire and begin collecting his or her full benefit. Retirement ages are generally expressed as a combination of age and years of service. For example, Alabama allows its Tier I employees to retiree with full benefits at age 60 once they have 10 years of service, or any age once they attain 25 years of service. In the table, these are marked as “60/10” and “Any/25,” respectively.  

    Many states also offer teachers the option to retire early with a reduced benefit. For example, Arizona allows teachers to claim a reduced pension benefit beginning at age 50 for those employees with five or more years of service. The farther away the worker is from the plan's normal retirement age, the larger the reduction they face. Those reductions are permanently locked in once the employee begins collecting their benefit. 

    See the table below for the normal and early retirement ages in your state. For more information, check out our state pages, or contact your state's pension plan. 

    State

    Plan Name

    Tier

    Normal Retirement Eligibility: (Age/Years of Service)

    Early Retirement Eligibility: (Age/Years of Service)

    Alabama

    Teachers' Retirement System (TRS) - Tier 1

    Hired before January 1, 2013

    60/10; Any/25

    Alabama

    Teachers' Retirement System (TRS) - Tier 2

    Hired on or after January 1, 2013

    62/10

     

    Alaska

    Alaska Teachers Retirement System

    Hired on or after July 1, 1990 and before July 1, 2006

    60/8; Any/20

    55/8

    Alaska

    Alaska Teachers Retirement System

    Hired after July 1, 2006

    N/A

    N/A

    Arizona

    Arizona State Retirement System

    Hired before Jan. 1, 1984

    60/10; 65/1; Age + YOS = 80;

    50/5

    Arizona

    Arizona State Retirement System

    Hired on or after Jan. 1, 1984 and before July 1, 2011

    62/10; 65/1; Age + YOS = 80

    50/5

    Arizona

    Arizona State Retirement System

    Hired on or after July 1, 2011

    65/1; 62/10; 60/25; 55/30

    50/5

    Arkansas

    Arkansas Teacher Retirement System

     

    60/5; Any/28

    Any/25

    California

    California State Teachers' Retirement System (CalSTRS)

    Hired before January 1, 2012

    60/5

    50/30; 55/5

    California

    California State Teachers' Retirement System (CalSTRS)

    Hired on or after January 1, 2013

    62/5

    55/5

    Colorado

    Public Employees' Retirement Association (PERA)

    Hired before July 1, 2005; vested on January 1, 2011

    50/30; 55 and AGE + YOS = 80; 65/5

    50/25; 55/20; 60/5

    Colorado

    Public Employees' Retirement Association (PERA)

    Hired after June 30, 2005 and before January 1, 2007; vested on January 1, 2011

    Any/35; 55 and AGE + YOS = 80; 65/5

    50/25; 55/20; 60/5

    Colorado

    Public Employees' Retirement Association (PERA)

    Hired after December 31, 2006 and before January 1, 2011

    Any/35; 55 and AGE + YOS = 85; 65/5

    50/25; 55/20; 60/5

    Colorado

    Public Employees' Retirement Association (PERA)

    Hired after December 31, 2010

    Any/35; 58 and AGE + YOS = 88; 65/5

    50/25; 55/20; 60/5

    Connecticut

    Teachers' Retirement Board

    All

    60/20; Any/35

    60/10; 55/20; Any/25

    Delaware

    Delaware State Employees' Pension Plan

    Hired on or after Jan. 1, 1997 and before Jan. 1, 2012

    62/5; 60/15; Any/30

    55/15; Any/25

    Delaware

    Delaware State Employees' Pension Plan

    Hired on or after Jan. 1, 2012

    65/10; 60/20; Any/30

    55/15; Any/25

    District of Columbia

    District of Columbia Teachers' Retirement Plan

    Hired before Nov. 1, 1996

    62/5; 60/20; 55/30

    District of Columbia

    District of Columbia Teachers' Retirement Plan

    Hired on or after Nov. 1, 1996

    62/5; 60/20; Any/30

    Florida

    Florida Retirement System Pension Plan: Regular Class

    Hired before July 1, 2011

    62/6; Any/30

    42/6

    Florida

    Florida Retirement System Pension Plan: Regular Class

    Hired on or after July 1, 2011

    65/8; Any/33

    45/8

    Florida

    Florida Retirement System Investment Plan

    Effective July 1, 2002

    Any/1

    N/A

    Georgia

    Teachers Retirement System of Georgia (TRS)

     

    60/10; Any/30

    Any/25

    Hawaii

    Employees’ Retirement System of the State of Hawaii (ERS) - Contributory Plan for General Employees

    Hired before July 1, 1984

    55/5

    Any/25

    Hawaii

    Employees’ Retirement System of the State of Hawaii (ERS) - Noncontributory Plan

    Hired on or after July 1, 1984 and before July 1, 2006

    55/30; 62/10

    55/20

    Hawaii

    Employees’ Retirement System of the State of Hawaii (ERS) - Hybrid Plan

    Hired on or after July 1, 2006 and before July 1, 2012

    55/30; 62/5

    50/20

    Hawaii

    Employees’ Retirement System of the State of Hawaii (ERS) - Hybrid Plan

    Hired on or after July 1, 2012

    60/30; 65/10

    50/20

    Idaho

    Public Employee Retirement System of Idaho (PERSI)

     

    65/5; Age + YOS = 90

    55/5

    Illinois

    Teachers' Retirement System of the State of Illinois

    Hired before Jan. 1, 2011 (Tier 1)

    65/any; 62/5; 60/10; 55/35

    55/20

    Illinois

    Teachers' Retirement System of the State of Illinois

    Hired on or after Jan. 1, 2011 (Tier 2)

    65/any; 67/10

    62/10

    Indiana

    Indiana State Teachers Retirement Fund

     

    65/10; 60/15; age 55 and age + YOS = 85

    50/15

    Iowa

    Iowa Public Employees Retirement System (IPERS)

    Retired before July 1, 2012

    62/20; 65/4; 55 and AGE + YOS = 88; 70 and still working for IPERS

    55/4

    Iowa

    Iowa Public Employees Retirement System (IPERS)

    Hired after June 30, 2012

    62/20; 65/7; 55 and AGE + YOS = 88; 70 and still working for IPERS

    55/7

    Kansas

    Kansas Public Employees Retirement System: School Tier 1

    Hired before July 1, 2009

    65/1; 62/10; Age + YOS = 85

    55/10

    Kansas

    Kansas Public Employees Retirement System: School Tier 2

    Hired on or after July 1, 2009 and before Jan. 1, 2015

    65/5; 60/30

    55/10

    Kansas

    Kansas Public Employees Retirement System: School Tier 3 (Cash Balance)

    Hired on or after Jan. 1, 2015

    65/5; 60/30

    55/10

    Kentucky

    Kentucky Teachers' Retirement System

    Hired on or after July 1, 1983 and before July 1, 2002

    60/5; Any/27

    55/5

    Kentucky

    Kentucky Teachers' Retirement System

    Hired on or after July 1, 2002 and before July 1, 2008

    60/5; Any/27

    55/5

    Kentucky

    Kentucky Teachers' Retirement System

    Hired on or after July 1, 2008

    60/5; Any/27

    55/10

    Louisiana

    Teachers' Retirement System of Louisiana

    Hired before July 1, 1999

    60/5; Any/20;

    Louisiana

    Teachers' Retirement System of Louisiana

    Hired on or after July 1, 1999 and before Jan. 1, 2011

    60/5; 55/25; Any/30

    Any/20

    Louisiana

    Teachers' Retirement System of Louisiana

    Hired on or after Jan. 1, 2011

    60/5

    Any/20

    Maine

    Maine Public Employees Retirement System: State and Teacher's Retirement Program

    Hired before July 1, 1983

    60/1

    Any/25

    Maine

    Maine Public Employees Retirement System: State and Teacher's Retirement Program

    Hired on or after July 1, 1983 and before Oct. 1, 1989

    62/1

    Any/25

    Maine

    Maine Public Employees Retirement System: State and Teacher's Retirement Program

    Hired on or after Oct. 1, 1994 and before July 1, 2006

    62/1

    Any/25

    Maine

    Maine Public Employees Retirement System: State and Teacher's Retirement Program

    Hired on or after July 1, 2006

    65/1

    Any/25

    Maryland

    Maryland State Retirement and Pension System: Teachers' Pension System

    Hired on or after July 1, 2011

    65/10; Age + YOS = 90;

    60/15

    Maryland

    Maryland State Retirement and Pension System: Teachers' Pension System

    Hired between Jan. 1, 1980 and July 30, 2011

    65/2; 64/3; 63/4; 62/5; any/30

    60/15

    Massachusetts

    Massachusetts Teachers' Retirement System

    Hired on or after Jan. 1, 1979 and before Jan. 1, 1984

    55/10; Any/20

    Massachusetts

    Massachusetts Teachers' Retirement System

    Hired on or after Jan. 1, 1984 and before July 1, 1996

    55/10; Any/20

    Massachusetts

    Massachusetts Teachers' Retirement System

    Hired on or after July 1, 1996 and before July 1, 2001

    55/10; Any/20

    Massachusetts

    Massachusetts Teachers' Retirement System

    Hired on or after July 1, 2001 and before April 1, 2012

    55/10; Any/20

    Massachusetts

    Massachusetts Teachers' Retirement System

    Hired on or after April 1, 2012

    60/10

     

    Michigan

    Public School Employees' Retirement System - Basic

    Hired before January 1, 1990 and retired before February 1, 2013

    55/30; 60/10

    55/15

    Michigan

    Public School Employees' Retirement System - Member Investment Plan (MIP) Fixed - Option 1

    Hired before January 1, 1990, elected MIP plan - 25 YOS on February 1, 2013 (Option 1)

    Any/30; 60/5; 60/10

    55/15

    Michigan

    Public School Employees' Retirement System - Member Investment Plan (MIP) Fixed - Option 2

    Hired before January 1, 1990, elected MIP plan - 25 YOS on February 1, 2013 (Option 2)

    Any/30; 60/5; 60/10

    55/15

    Michigan

    Public School Employees' Retirement System - Member Investment Plan (MIP) Fixed - Option 3

    Hired before January 1, 1990, elected MIP plan - 25 YOS on February 1, 2013 (Option 3)

    Any/30; 60/5; 60/10

    55/15

    Michigan

    Public School Employees' Retirement System - Member Investment Plan (MIP) Fixed - Option 4

    Hired before January 1, 1990, elected MIP plan - 25 YOS on February 1, 2013 (Option 4)

    Any/30; 60/5; 60/10

    55/15

    Michigan

    Public School Employees' Retirement System - Member Investment Plan (MIP) Graded - Option 1

    Hired after December 31, 1989 and before July 1, 2008 - 20 YOS on February 1, 2013 (Option 1)

    Any/30; 60/5; 60/10

    55/15

    Michigan

    Public School Employees' Retirement System - Member Investment Plan (MIP) Graded - Option 2

    Hired after December 31, 1989 and before July 1, 2008 - 20 YOS on February 1, 2013 (Option 2)

    Any/30; 60/5; 60/10

    55/15

    Michigan

    Public School Employees' Retirement System - Member Investment Plan (MIP) Graded - Option 3

    Hired after December 31, 1989 and before July 1, 2008 - 20 YOS on February 1, 2013 (Option 3)

    Any/30; 60/5; 60/10

    55/15

    Michigan

    Public School Employees' Retirement System - Member Investment Plan (MIP) Graded - Option 4

    Hired after December 31, 1989 and before July 1, 2008 - 20 YOS on February 1, 2013 (Option 4)

    Any/30; 60/5; 60/10

    55/15

    Michigan

    Public School Employees' Retirement System - Member Investment Plan (MIP) Plus

    Hired after June 30, 2008 and before July 1, 2010 (MIP Plus)

    Any/30; 60/5; 60/10

    55/15

    Michigan

    Public School Employees' Retirement System - Pension Plus Plan (PPP)

    Hired after June 30, 2010 (Pension Plus Plan)

    60/10

    55/15

    Minnesota

    Minnesota Teachers Retirement Association

    Hired on or before June 30, 1989

    65/3; 62/30; Age + YOS = 90

    55/3; Any/30

    Minnesota

    Minnesota Teachers Retirement Association

    Hired after June 30, 1989

    66/3

    55/3

    Mississippi

    Mississippi Public Employees' Retirement System

    Hired before July 1, 2007

    60/4; any/25

    Mississippi

    Mississippi Public Employees' Retirement System

    Hired on or after July 1, 2007 but before July 1, 2011

    60/8; any/25

    Mississippi

    Mississippi Public Employees' Retirement System

    Hired on or after July 1, 2011

    65/8; any/30

    60/8

    Missouri

    Public School Retirement System of Missouri

    Retire on or before July 1, 2013

    60/5; any/30; Age + YOS = 80

    55/5; any/25

    Missouri

    Public School Retirement System of Missouri

    Retire after July 1, 2013

    60/5; any/30; Age + YOS = 80

    55/5; any/25

    Montana

    Montana Teacher's Retirement System (TRS)

     

    60/5; Any/25

    50/5

    Nebraska

    Nebraska School Employees' Retirement System

     

    65/1; age 55 and age + YOS = 85

    60/5

    Nevada

    Nevada Public Employees' Retirement System

    Hired on or after July 1, 2001 and before Jan. 1, 2010

    65/5; 60/10; Any/30

    Any/5

    Nevada

    Nevada Public Employees' Retirement System

    Hired on or after Jan. 1, 2010

    65/5; 62/10; Any/30

    Any/5

    New Hampshire

    New Hampshire Retirement System

    Hired before Jan. 1, 2002

    60/1

    50/10; 20 YOS and Age + YOS = 70

    New Hampshire

    New Hampshire Retirement System

    Hired on or after Jan. 1, 2002 and before July 1, 2009

    60/1

    50/10; 20 YOS and Age + YOS = 70

    New Hampshire

    New Hampshire Retirement System

    Hired on or after July 1, 2009 and before July 1, 2011

    60/1

    50/10; 20 YOS and Age + YOS = 70

    New Hampshire

    New Hampshire Retirement System

    Hired on or after July 1, 2011

    65/1

    60/30

    New Jersey

    New Jersey Teachers' Pension and Annuity Fund

    Hired before July 1, 2007 (Tier 1)

    60/10; 55/25

    Any/25

    New Jersey

    New Jersey Teachers' Pension and Annuity Fund

    Hired on or after July 1, 2007 and before Nov. 2, 2008  (Tier 2)

    60/10

    Any/25

    New Jersey

    New Jersey Teachers' Pension and Annuity Fund

    Hired on or after Nov. 2, 2008 and before May 22, 2010 (Tier 3)

    62/10

    Any/25

    New Jersey

    New Jersey Teachers' Pension and Annuity Fund

    Hired on or after May 22, 2010 and before June 28, 2011 (Tier 4)

    62/10

    Any/25

    New Jersey

    New Jersey Teachers' Pension and Annuity Fund

    Hired on or after June 28, 2011 (Tier 5)

    65/10

    Any/30

    New Mexico

    New Mexico Educational Retirement Board

    Hired before July 1, 2010

    65/5; Any/25; Age 60 and age + YOS = 75

    Age + YOS = 75

    New Mexico

    New Mexico Educational Retirement Board

    Hired on or after July 1, 2010 and before July 1 , 2013

    67/5; Any/30; Age 65 and Age + YOS = 80

    Age + YOS = 80

    New Mexico

    New Mexico Educational Retirement Board

    Hired on or after July 1 , 2013

    67/5; 55/30; Age 65 and Age + YOS = 80

    Any/30; Age + YOS = 80

    New York

    New York State Teachers' Retirement System

    Hired on or after July 27, 1976 and before Jan. 1, 2010 (Tiers 3 & 4)

    62/5; any/30

    55/5

    New York

    New York State Teachers' Retirement System

    Hired on or after Jan. 1, 2010 and before April 1, 2012 (Tier 5)

    62/10; 57/30

    55/10

    New York

    New York State Teachers' Retirement System

    Hired on or after April 1, 2012 (Tier 6)

    63/10

    55/10

    North Carolina

    Teachers' and State Employees' Retirement System (TSERS)

    Hired before August 1, 2011

    65/5; 60/25; Any/30

    50/20; 60/5

    North Carolina

    Teachers' and State Employees' Retirement System (TSERS)

    Hired after July 31, 2011

    65/10; 60/25; Any/30

    50/20; 60/10

    North Dakota

    North Dakota Teachers' Fund for Retirement

    Hired before July 1, 2008 and age 55 by July 1, 2013

    65/3; Age + YOS = 85

    55/3

    North Dakota

    North Dakota Teachers' Fund for Retirement

    Hired before July 1, 2008 and younger than 55 on July 1, 2013

    65/3; Age 60 and Age + YOS = 90

    55/3

    North Dakota

    North Dakota Teachers' Fund for Retirement

    Hired on or after July 1, 2008 and retire after July 1, 2013

    65/5; Age 60 and Age + YOS = 90

    55/5

    Ohio

    State Teachers Retirement System of Ohio

    Retiring before Aug. 1, 2015

    65/5; Any/30

    55/25; 60/5

    Ohio

    State Teachers Retirement System of Ohio

    Retiring on or after Aug. 1, 2015 and before Aug. 1, 2017

    65/5; Any/31

    55/26; 60/5; Any/30

    Ohio

    State Teachers Retirement System of Ohio

    Retiring on or after Aug. 1, 2019 and before Aug. 1, 2021

    65/5; Any/33

    55/28; 60/5; Any/30

    Ohio

    State Teachers Retirement System of Ohio

    Retiring on or after Aug. 1, 2026

    65/5; 60/35

    60/5; Any/30

    Oklahoma

    Oklahoma Teachers Retirement System (TRS) - Low Base

    Hired after June 30, 1979 and before July 1, 1992

    62/5; AGE + YOS = 80

    55/5; Any/30 YOS

    Oklahoma

    Oklahoma Teachers Retirement System (TRS) - High Base

    Hired after June 30, 1979 and before July 1, 1992

    62/5; AGE + YOS = 80

    55/5; Any/30 YOS

    Oklahoma

    Oklahoma Teachers Retirement System (TRS) - Low Base

    Hired after June 30, 1992 and before July 1, 1995

    62/5; AGE + YOS = 90

    55/5; Any/30 YOS

    Oklahoma

    Oklahoma Teachers Retirement System (TRS) - High Base

    Hired after June 30, 1992 and before July 1, 1995

    62/5; AGE + YOS = 90

    55/5; Any/30 YOS

    Oklahoma

    Oklahoma Teachers Retirement System (TRS) - Low Base

    Hired after June 30, 1995 and before November 1, 2011

    62/5; AGE + YOS = 90

    55/5; Any/30 YOS

    Oklahoma

    Oklahoma Teachers Retirement System (TRS) - Low Base

    Hired on or after November 1, 2011

    65/5; 60 and AGE + YOS = 90

    60/5; Any/30 YOS

    Oregon

    Oregon Public Employees Retirement System: Tier One

    Hired before July 14, 1995

    58/5; any/30

    55/5

    Oregon

    Oregon Public Employees Retirement System: Tier Two

    Hired on or after Jan. 1, 1996 and before Aug. 29, 2003

    60/5; any/30

    55/5

    Oregon

    Oregon Public Employees Retirement System: OPSRP

    Hired on or after Aug. 28, 2003

    65/5; 58/30

    55/5

    Pennsylvania

    Pennsylvania Public School Employees' Retirement System (PSERS) - Class T-C

    Hired before July 1, 2001

    62/1; 60/30; Any/35

    Any/5; 55/25

    Pennsylvania

    Pennsylvania Public School Employees' Retirement System (PSERS) - Class T-D

    Hired after June 30, 2001 and before July 1, 2011

    62/1; 60/30; Any/35

    Any/5; 55/25

    Pennsylvania

    Pennsylvania Public School Employees' Retirement System (PSERS) - Class T-E

    Hired on or after July 1, 2011, Class T-E

    65/3; 35 YOS and AGE + YOS = 92

    Any/10; 55/25

    Pennsylvania

    Pennsylvania Public School Employees' Retirement System (PSERS) - Class T-F (Optional)

    Hired on or after July 1, 2011, Class T-F

    65/3; 35 YOS and AGE + YOS = 92

    Any/10; 55/25

    Rhode Island

    Employees' Retirement System of Rhode Island (ERSRI) - Schedule B2

    Hired after September 30, 2009 and before July 1, 2012

    65/10; 62/29

    62/20

    Rhode Island

    Employees' Retirement System of Rhode Island (ERSRI) - Schedule AB

    20 YOS on July 1, 2012

    60/10

    55/20

    Rhode Island

    Employees' Retirement System of Rhode Island (ERSRI)

    Hired after June 30, 2012

    Social Security FRA

    Social Security FRA-5/20

    South Carolina

    South Carolina Retirement System

    Hired before July 1, 2012 (Class 2)

    65/5; Any/28

    60/5; 55/25

    South Carolina

    South Carolina Retirement System

    Hired on or after July 1, 2012 (Class 3)

    65/8; 8 YOS and Age + YOS = 90

    60/8

    South Dakota

    South Dakota Retirement System (Class A)

    Retired before July 1, 2008

    65/3; Age 55 and Age + YOS = 85

    55/3

    South Dakota

    South Dakota Retirement System (Class A)

    Hired on or after July 1, 2008

    65/3; Age 55 and Age + YOS = 85

    55/3

    Tennessee

    Tennessee Consolidated Retirement System

    Hired on or after July 1, 1976

    60/5;  any/30

    55/5; any/25

    Texas

    Teacher Retirement System of Texas

    Tier 1: hired on or before Sept. 1, 1980, or hired on or before Sept. 1, 2005 and at least age 50 at that time or age + YOS = 70 that year

    65/5; Any/5 and Age + YOS = 80

    55/5; Any/30

    Texas

    Teacher Retirement System of Texas

    Tier 2: hired after Sept. 1, 1980 and on or before Sept. 1, 2007, and not in Tier 1

    65/5; Any/5 and Age + YOS = 80

    55/5; Any/30

    Texas

    Teacher Retirement System of Texas

    Tier 3: hired after Sept. 1, 2007

    65/5; 60/5 and age + YOS = 80

    55/5; Any/30; age + YOS = 80

    Utah

    Tier 1 Contributory

    Hired before July 1, 1975

    65/4; Any/30

    60/20; 62/10

    Utah

    Tier 1 Contributory

    Hired after June 30, 1975 and before July 1, 1986

    65/4; Any/30

    60/20; 62/10

    Utah

    Tier 1 Noncontributory

    Hired after June 30, 1986 and before July 1, 2011

    65/4; Any/30

    60/20; 62/10; Any/25

    Utah

    Tier 2 Public Employees Contributory Retirement System

    Hired after June 30, 2011

    65/4; Any/35

    60/20; 62/10

    Vermont

    State Teachers' Retirement System of Vermont

    Hired before July 1, 1981

    60/any; Any/30

    55/5

    Vermont

    State Teachers' Retirement System of Vermont

    Hired on or after July 1, 1981 and before July 1, 1985 (or at least age 57 on July 1, 2010)

    62/any; Any/30

    55/5

    Vermont

    State Teachers' Retirement System of Vermont

    Hired on or after July 1, 1985 (and younger than age 57 on July 1, 2010)

    65/any; Age + YOS = 90

    55/5

    Virginia

    Virginia Retirement System (VRS) - Plan 1

    Hired before July 1, 2010 and vested on January 1, 2013

    65/5; 50/30

    55/5; 50/10

    Virginia

    Virginia Retirement System (VRS) - Plan 2

    Hired after June 30, 2010

    Social Security FRA/5; AGE + YOS = 90

    60/5

    Washington

    Washington Teachers' Retirement System (TRS) - Plan 2

    Hired after September 30, 1977 and before July 1, 1996

    65/5

    55/20

    Washington

    Washington Teachers' Retirement System (TRS) - Plan 3

    Hired after June 30, 1996 and before May 1, 2013

    65/10; 65/5 with 1+ YOS after age 44

    55/10

    Washington

    Washington Teachers' Retirement System (TRS) - Plan 3

    Hired on or after May 1, 2013

    65/10; 65/5 with 1+ YOS after age 44

    55/10

    West Virginia

    Teachers' Retirement System (TRS)

     

    55/30; 60/5; Any/35

    Any/30-35

    Wisconsin

    Wisconsin Retirement System (WRS)

    Retired before January 1, 2000

    65/Any; 57/30

    55/Any

    Wisconsin

    Wisconsin Retirement System (WRS)

    20 YOS on January 1, 2000

    65/Any; 57/30

    55/Any

    Wisconsin

    Wisconsin Retirement System (WRS)

    Hired after June 30, 2011

    65/Any; 57/30

    55/Any

    Wyoming

    Wyoming Public Employee Pension Plan

    Hired before Sept. 1, 2012

    60/4; Age + YOS = 85

    50/4; Any/25

    Wyoming

    Wyoming Public Employee Pension Plan

    Hired on or after Sept. 1, 2012

    65/4; Age + YOS = 85

    55/4; Any/25

    Note: Table is based on data from the Urban Institute's State and Local Employee Pension Plan Database

  • The Census Bureau’s Annual Survey of School System Finances compiles total education spending and revenue across the entire country. The latest data, released earlier this week, shows teacher benefits continue to eat away at school budgets. 

    In total, public school expenditures have tripled since 1992 (including inflation). The table below shows how those dollars are being spent across broad categories. Figures for all years reflect current expenditures and do not include capital costs or debt. 

    As the table shows, school districts are spending more and more of their budgets on employee benefits, at the expense of base salaries and wages. Over the long term, the percentage of education budgets going toward salaries fell from 65.0 percent in the 1991-92 school year to 55.7 percent in 2017-18. Over the same time period, the percentage of school district budgets going toward employee benefits increased from 15.0 to 24.3 percent.

     

    As a share of total expenditures, benefits now eat up nine percentage points more than they did in 1992. 

    These are steady, long-term trends, but they're no less troubling. Increased spending on benefits is one reason teacher salaries have been flat, in real terms, over the last few decades. Benefits are also a less efficient use of money than salaries, since teachers value $1 in take-home pay more than they do $1 in benefit spending. Worse, much of these rising benefit costs reflect the growing burden of debt costs, not actual benefit enhancements for teachers and retirees. 

    Updated on May 18, 2020

    Taxonomy: 
  • A Massachusetts teacher emails us with a question about her options for an early retirement: 

    I am a teacher in Massachusetts. With my last child going to college next year, we have kicked around the idea of moving out of state. This would be after my 15th year of teaching and I will be 51 years old.  I see that I am vested after 10 years so my question is:

     

    Could I retire after next school year (my 15th year at age 51) but defer my payment until I am 55 or 60?  This would give me 15 years at 55 which I believe would be a reduced pension, or 15 years at 60, which would be a full pension.  

     

    I wanted to see if these plans were an option that would be available to me after my 15th year of teaching.

     

    Any information you could provide would be greatly appreciated. 

     

    Thank you, 

     

    Lisa 

     

    Hi Lisa, 

    The short answer is yes, you could certainly take either of those options. As long as you don't withdraw your contributions from the Massachusetts Teachers' Retirement Systems, you'd be eligible to begin collecting a pension at either the early or normal retirement ages. Those ages depend on when you started teaching in Massachusetts, see here to determine which tier you are in. 

    Massashusetts provides a retirement "percentage chart" to help you make your decision. With 15 years of service, if you begin collecting your pension at age 55, you'd be eligible for 22.5 percent of your final average salary. If you wait to collect until age 60, you'd be eligible for a pension equivalent to 30 percent of your final salary. 

    There are two things to be aware of. One is that your pension will eventually be based on your salary in the last years in which you were employed. That is, your pension amount will essentially be frozen from now until you begin collecting; it won't increase due to inflation.

    The second thing is that starting over in a new state would mean significantly less in terms of pension wealth than sticking it out in Massachusetts. Two smaller pensions are usually worth much less than one larger one. This article gives a good explanation of how that works, with a Massachusetts example.  

    I hope you don't let those cautions discourage you from pursuing your plans to spend time with your family, but hopefully they're helpful as you weigh your options. Best, 

    ~Chad Aldeman 

    Note: This is a real question submitted to us. We have removed all personally identifiable information, but we believe there's a value in sharing frequently asked questions to benefit others with similar concerns. If you have a question you would like answers to, please feel free to email us at teacherpensions@bellwethereducation.org. Please note that by submitting a question to us, you agree to let us share the question and our answer publicly here on the TeacherPensions.org blog. 

  • At the same time as states face budget shortfalls in the wake of the COVID-19 pandemic, public pension plans also lost an estimated $400 billion in assets in the first three months of 2020. In response, as part of a larger request for a COVID-19 relief package the Illinois Senate President called for $10 billion in federal funding to help plug Illinois' state and municipal pension funding gaps. 

    Historically, Congress has enacted rules and regulations to govern private-sector retirement plans, but it has mostly shied away from extending those rules to the public sector. Should that change? Are state and local pension plans in such a dire situation that they need the federal government's support? And if so, what should Congress ask for in return? We reached out a range of voices to weigh in on these questions. Here are their responses: 

    Andrew Biggsresident scholar at the American Enterprise Institute

    Public sector pensions have long argued that they need not abide by the stricter federal funding rules applied to private sector pensions. Private pensions must assume conservative rates of return on investments and must address unfunded liabilities promptly. Under those rules, the average single-employer private pension today is about 86% funded, assuming a 3.4% “discount rate” applied to plan liabilities. Measured using that same discount rate, the average state and local government pension would be around 38% funded. Simply put, for each dollar of promised future benefits, private sector pensions have set aside nearly twice as much money as state and local plans.

    State and local governments have long fought stricter pension funding rules. They assumed average investment returns of 7.3% in 2019 and amortized unfunded liabilities over decades rather than years. They claimed that governments have special powers that make the more-prudent federal regulations unnecessary. These arguments were wrong before and today, with pensions worse-funded than following the Great Recess and Illinois requesting $10 billion in federal aid to stay afloat, they are more clearly mistaken.

    Federal law already regulates state government workplaces via minimum wage laws, the Affordable Care Act and other means. There is today compelling evidence that underfunded state and local government pensions should be similarly-regulated. But federal regulation of state and local pensions, by covering them under the Employee Retirement Income Security Act of 1974 (ERISA), could be made voluntary and come with certain benefits.

    Congress could allow state and local pensions to become ERISA-regulated in exchange for providing them with financial aid, such as to cover pension contributions over the next several years. Pension participants would also become employees eligible for Pension Benefit Guaranty Corporation benefit insurance should their plan become insolvent in the future. In return, the state or local government would need a credible plan to significantly increase future funding of their pension and address unfunded liabilities promptly, while also paying PBGC insurance premiums. Congress might also include a provision requiring that governments seeking federal pensions assistance enroll their employees in Social Security, if not already covered.

    But ERISA regulation provides another option: if a state cannot or does not wish to fund a traditional pension to ERISA standards, it can instead freeze its pension and shift employees to a defined contribution, 401(k)-style plan. Because federal law pre-empts state law, ERISA coverage would free states like Illinois from legal prohibitions on changing future benefit accruals or altering the plan’s structure.

    The issue is simple: Federal pension regulations exist for a good reason and those reasons apply to governments as much as to private companies. Those regulations offer employers a choice: either run a traditional pension prudently, using conservative assumptions and prompt addressing of unfunded liabilities, or don’t run one at all. 

     

    Chantel Boyens, principal policy associate in the Income and Benefits Policy Center at the Urban Institute 

    One important role of the federal government in supporting state and local governments as they address ballooning debt is to ensure that any steps taken to address financial shortfalls do not undermine the retirement security of workers broadly, and especially the adequacy of benefits for lower-wage workers. This includes preventing state and local governments from reducing pensions below Social Security levels for workers not covered by the program. Pension plans should not be allowed to continue reducing future benefits for workers not covered by Social Security through loopholes and gaps in the existing regulations. 

    Like other state and local pension plans, plans offered to workers not covered by Social Security have reduced promised benefits for new hires substantially since the Great Recession. But because these plans are offered to workers not covered by Social Security, they are required by law to provide participants with benefits that are at least equivalent to those provided by Social Security. However, recent analyses by Chad Aldeman and Laura Quinby show that the safe harbor test used to determine whether state and local pension plans meet this threshold is not adequate. 

    As state and local pension plans consider steps to address funding shortfalls, the federal government has a responsibility to ensure that the retirement safety net provided by Social Security protects all workers. For workers outside of Social Security, that means strengthening the safe harbor rule that governs their non-covered pension plans. For example, the rule should consider protections for workers who change jobs and may move in and out of Social Security coverage. Most plans use backloaded benefit formulas and vesting requirements that favor long-tenured workers

    The risks posed to workers by shortfalls in state and local pension plans also underscores the case for moving to a truly universal Social Security program. Covering all workers would impose transition costs on states. The federal government could consider options to help states manage these transition costs over time or even subsidize a portion of the cost to protect the adequacy of benefits for all workers. 

     

    Keith Brainard, research director, on behalf of the National Association of State Retirement Administrators

    A careful review of the operations and funding of public pensions, their share of overall state and local budgets, and the steps state and local governments are taking to bring their pension plans into long-term solvency, reveals that on the whole, state and local pensions are weathering the COVID-19 crisis. Public retirement system administrative operations have successfully been moved remotely; payments to retirees continue to be made on time and in full; trillions of dollars in public pension fund assets continued to be managed and invested in the financial markets; and measured changes can be expected to continue to be made to ensure public pensions’ long-term sustainability. Suggestions for federal intervention into public pension plans continue to be resoundingly rebuked.

    NASRA opposes efforts to both impose new federal regulations on state retirement systems, and to restrict states’ ability to design plans and manage investments. NASRA testimony before a U.S. Congressional Committee in 2011, remains relevant today. Over the last generation, most public pension plans have moved from financing on a pay-as-you-go basis, to funding based on actuarial methods. State and local pensions’ long-term financing strategy, which takes place over decades, should not be mistakenly juxtaposed against current annual revenues and expenditures of state and local governments. Given the differing plan designs and financial pictures across the country, one-size-fits-all federal intervention is unhelpful.

    As national organizations representing state and local governments and elected officials have jointly stated, “Federal regulation is neither needed nor warranted, and public retirement systems do not seek federal financial assistance. State and local governments have and continue to take steps to strengthen their pension reserves and operate under a long-term time horizon.”

     

    Dr. Marguerite Roza, research professor at Georgetown University and director of the Edunomics Lab

    First and foremost, any federal action on state and municipal pensions must include an expansion of ERISA – the law that requires private sector pension systems to properly fund their obligations on an annual basis. Those underfunded systems that can’t meet the ERISA terms and needing a bailout would then be subject to the following requirements:

    1. Close under-funded pension plans to new salary dollars. Pension systems deep in a hole must first stop digging, in this case by closing the pension fund to new salary obligations. Pensions on existing salary dollars would be protected and continue to earn years of service. Employers could award new raises, but the increments of the raise would be non-pensionable (although could be eligible for other compliant retirement plans). Often it is local employers who award late-career raises (which drive up pension obligations) but states who then must pay the pensions. Edunomics Lab analysis shows that California’s CALSTRS plan would have over $16B less in obligations if such a requirement had been imposed 10 years ago (even after accounting for what would be lower employee contributions).  

    2. Pay for any bailout with a federal tax on pension payments from systems needing rescue funds. In places like Illinois, leaders pledged to unsustainable pensions, ignored their debts, and paid more in salaries (further driving up pension debt). Leaders in other locales, like neighboring Wisconsin, followed a path of fiscal prudence and paid its debts, even when doing so has meant teachers earn $10K less per year. So, who should own Illinois’ pension tab?

    Illinois’ TRS fund needs a bailout, and while Illinois leaders haven’t been able to legally modify the generous pensions it promised, the federal government can tax those payments. The tax could take the form of a flat or progressive rate, collected by the pension fund via a monthly withdrawal from pension checks. Where a retired teacher earns $130,000 per year from the Illinois TRS (and yes, plenty do), the payments could be taxed before they ever reach the retiree. Such a tax would only last as long as the fund needed bailing.

    This plan gives states the tools they need to get back on track financially without passing the debt burden to younger generations who neither benefitted from the spending nor had no say in the decisions that got us here.

     

  • In a recent op-ed for The Sacramento Bee, Ted Toppin, the chairman of Californians for Retirement Security, argues that traditional pension plans help “flatten the curve” and are “built to withstand the extremes of economic cycles.”

    Unfortunately for Californians, the required contribution rates into two the state pension plans covering teachers, firefighters, and police officers—CalSTRS and CalPERS—have been rising for two decades, and will have to rise again in the wake of the coronavirus. 

    What will the current market downturn mean for those plans? It’s still too early to know for sure, but in a new piece for The 74, I look back at what happened to CalSTRS in the last recession: 

    Between declining assets and rising liabilities, CalSTRS went from being 89 percent funded in 2007 to 67 percent funded in 2012. Its unfunded liabilities — the gap between what it had saved and what it owed to current and future retirees — grew from $19 billion to $71 billion. 

     

    Rather than seizing the opportunity to consider alternative models, California legislators hunkered down with a number of small changes. Like most states, California made its pension benefits worse by creating a new, less generous tier of pension benefits that applied only to new hires. For those workers only, California raised the retirement age by two years.

     

    The state also increased contribution rates required of teachers themselves, as well as state and district budgets. In legislation passed in 2014, the state scheduled CalSTRS contribution rates to slowly ramp up from a total of 18.3 percent in 2014 to 35.3 percent in 2020-21. 

    CalPERS has pursued similar changes, but neither plan is prepared for the coming recession. Across both plans, the state had an unfunded liability totaling $246 billion as of last April. That figure is surely much higher today. Just like in the last recession, costs are likely to trickle down to workers and taxpayers through higher contribution rates—not to mention less money available for all other public services.

    In short, the California pension plans have not yet flattened their curves. Workers and taxpayers will suffer the consequences.

  • Across the United States, growing unfunded pension liabilities have quietly slashed state education budgets, leaving fewer dollars for teacher salaries, classroom resources and other education priorities. A new report from Equable Institute has found the share of state education spending going to pension costs has nearly doubled from 7.5% in 2001 to 14.4% in 2018. The report is the first of its kind to quantify the effects of growing unfunded liabilities on the education system in detail.

    Hidden Education Funding Cuts provides a state by state analysis of state education funding trends over the past two decades, and then adjusts that spending for inflation and pension costs to show what the ultimate effect has been of growing unfunded pension liabilities on K–12 resources. 

    Want to find out more about the hidden education cuts in your state? State specific reports and the national summary paper can be downloaded at Equable.org/hiddenfundingcuts.

    What are “hidden education funding cuts”?

    Since 2001, teacher pension plans have collectively fallen hundreds of billions of dollars behind in the savings levels necessary to pay all future promised benefits. Meanwhile,  state K–12 education spending levels have generally been stagnant. Many states simply have not ensured education funding levels are keeping up with the increased costs created by pension funding shortfalls. 

    In an era when school districts nationwide are struggling financially, growing pension costs are exacerbating already-existing fiscal stress. The result is that less education money is available today for teacher salaries and classroom spending than there would be if teacher pension funds had been better managed over the past two decades. And that’s the hidden cut to education funding.

    Where the national trend has seen hidden cuts nearly double from 7.5% to 14.4% of state K–12 funding going to teacher pension costs, the state to state results have varied. In Pennsylvania, exploding teacher pension debt has caused the rate of hidden cuts to surge from 2% to 34% between 2001 and 2018. The absolute hidden cut level has reached a similar 34% in 2018 for Illinois, up from 12%.

    The effects of these cuts are felt particularly hard in high-need districts which have fewer local resources to draw on to fill in the gaps when education costs rise, creating less funding for teacher salaries and programs aimed at improving academic and other outcomes. 

    How did this happen? 

    Visit Equable’s interactive report website to dig into the details on how education budgets have stagnated while teacher pension costs soared since 2001.

    To see how individual states stack up against each other in terms of how much their hidden education funding cuts have changed over the past two decades, see the chart below. 

     


     

    Anthony Randazzo is executive director at Equable Institute, a bipartisan non-profit working to create a safe, more secure retirement for public workers everywhere.