Teacher Pensions Blog

If you’re not a public employee, it’s easy to brush away pensions as matter only for state lawmakers and affected workers. But it should be a national priority to ensure that all state and local government workers, especially teachers, have adequate retirement savings.

Even beyond the important role that teachers play in student lives and in the fabric of communities, there are simply a lot of them. Nationwide, there are 3.3 million public school teachers. Public school teachers are one of the largest professions in the U.S., and the largest class of workers with a college degree or higher. There are more public school teachers than lawyers, doctors, and retail salespersons, and there are as many teachers as nurses and social workers combined.

Source: Chad Aldeman and Andrew Rotherham, “Friends without Benefits,” Bellwether Education Partners, 2014. National Center for Education Statistics, “Fast Facts.” U.S. Bureau of Labor Statistics, “Employment and Earnings Online.” Diminish

And yet, current policies curtail the retirement security of this major class of workers. Current retirement systems don’t serve the majority of teachers, setting all-or-nothing service requirements of five or 10 years and offering minimal benefits during the first 20 years of service. In the median state, teachers need to work for a minimum of 24 years before their lifetime pension benefits are worth more than their own contributions plus interest.

On top of these equity issues, traditional pensions come at an expensive price. Tied to the teaching workforce is massive pension debt: Collectively, teacher pension debt accounts for $500 billion  of all state pension debt. For every dollar states and local school districts are contributing to teacher pension plans, an average of $.70 goes toward paying down pension debt. Massive pension debt crowds out other education funding, and in some cities, has forced reductions in crucial, basic public services, or caused large tax increases.

Rather than continuing a system that inequitably and inefficiently distributes benefits, states need to consider ways to provide affordable retirement benefits that will put all teachers on a path to retirement security. Because what would be good for this large, important group of workers, would also benefit the rest of our nation.