Blog: Mobility and Portability

States may be getting a deal for their teachers. Among other trends, the teaching force is simultaneously becoming younger and less experienced. This translates to cheaper costs for the state, but at the price of teacher retirement security.
Our schools are dealing with a lot more new teachers than they had in the past, and defined benefit pension systems aren’t set up to deal with this type of mobile workforce. What's causing the rise in mobility?
Pensions provide us with more than just financial data. Pensions also provide us with key information about teacher retention, reaching back for decades. In New York City, teachers do not remain in the profession as long as they did in the past. Instead of responding to this trend, the New York City teacher pension plan has become less generous to mobile teachers.
Last week we presented our new paper, Friends without Benefits: How States Systematically Shortchange Teachers' Retirement and Threaten Their Retirement Security, at the 39th annual conference of the Association of Education Finance and Policy (AEFP).
Just as teachers in Missouri cannot move between pension boundaries without incurring a financial penalty, teachers cannot move across state pension boundaries without incurring similar costs. This acts like a tariff that restricts the movement of human capital between pension systems.
Do pensions affect teacher retention decisions? According to their own data, state pension plans say no, at least for the vast majority of teachers.
In order to cut costs and recover from the recent recession, New York City recently lengthened the vesting requirement, the time period employees need to stay in order to qualify for even a minimum pension, from five years to ten. Now, half of all new teachers in the Big Apple will not qualify for a retirement benefit.
A “crisis” is sometimes in the eyes of the beholder. The public pension crisis has a lot to do with the broader broken compact between Americans and their government over fiscal priorities. Yet again, it’s a place where public school teachers are the leading edge of the great debate about what it means to be an American.
If you follow news about the District of Columbia Public Schools (DCPS) closely, you could be forgiven if you thought teacher turnover had increased since the schools were handed over to mayoral control in 2007. But, at least according to the city's teacher pension plan, turnover hasn't increased at all; it's actually declined slightly.
Where do we begin on the path to building a pension system that doesn’t further short-change Millennials?