Blog: Pension Politics

NFL players and teachers surprisingly have a lot in common. Neither has a pension plan that meets the majority of their needs. But for teachers, the failure of the plan to provide a good retirement benefit is particularly costly.
Spending on teacher pensions is often overlooked in analyzing school finance equity. Here are three reasons why that is a mistake.
Analyzing the false nostalgia of the bygone era of defined benefit pension plans.
California' legislature recently approved a onetime payment of $1 billion for the state's school districts. However, it won't translate into a real increase in district budgets since those funds are hardly enough to cover burgeoning pension costs.
Michigan is about to adopt legislation that would enroll new teachers in a portable defined contribution plan, with a shorter vesting period and more money going toward teacher retirements. That will cost the state a bit more money, but it's a win for teachers.
New Jersey's public employee pension fund faces a fiscal crisis. The candidates for Governor need to put forth serious plans to address the state's pension woes should they win election. Each candidate's plans have some strong features. However, they best solution would take elements from each.
Judge recently dismissed CPS's lawsuit claiming the state funds schools inequitably and operates an inequitable pension system. As a a result, the district once again faces serious finance troubles and Gov. Rauner is withholding $215 million for CPS until the legislature enacts pension reforms.
Puerto Rico’s pension system is an accelerated example of pension problems in the rest of the country. This is where many states are headed if they don't make reforms now.
Teacher pension systems compound inequitable school funding formulas. In Illinois, the state teacher pension fund funnels less money to the kids who need it the most.
School district spending on employee benefits has growth quickly. Now, over 22 percent of per pupil expenditures goes toward benefits payments. On average $2,524 is spent per student on benefits alone.