Teacher Pensions Blog

Hoping to earn more? Man up.

In 2016, the 35 highest paid University of California employees were all men. Not most, not the majority. Every single one. 

But this disparity isn’t exclusive to higher education – though it’s worth noting that the majority of the university’s high earners were doctors, and four were men’s sports coaches – the state’s K-12 education system reflects a gender gap as well.

In a country were 76 percent of teachers are women, we’d expect to see females as lead earners in a state’s public school system. But that isn’t the case. Just 15 of the state’s 50 highest K-12 school district earners are women. That same gender wage gap extends into retirement – just 12 of the top 50 beneficiaries in the California State Teachers’ Retirement System (CalSTRS) are women. And while we don’t have data on the racial make-up of this group, historically, these numbers are even worse for women of color.

We’re a pension blog, so while there are several systemic inequities at play here, we’re inclined to dig into this last number, 12 out of 50 beneficiaries. Across the country, most teachers (nine out of ten) are enrolled in a state-based defined benefit pension plan, like CalSTRS. These plans allot benefits according to a formula, multiplying years of experience, final average salary, and a pre-set multiplier, typically around 2.5 percent. Here’s an example:

The final average salary variable works against women. It's not progressive at all, and the highest pensions go to the people with the highest salaries. In California as in most other states, the “teachers’” retirement system also happens to include a lot of higher-paid principals and superintendents, who are more likely to be men. We know that women make up the majority of the teacher workforce, but are then vastly underrepresented in higher-paying leadership roles. Survey data from the American Association of School Administrators (AASA) show that about 77 percent of school superintendents identify as male. 

The fact that most of California's top pension recipients are men is a direct result of the state's back-loaded pension plan. A University of Arkansas study found that nearly two-thirds of CalSTRS entrants are pension losers. That is, the majority of California educators will either be ineligible for a pension or the pension they do qualify for is not worth as much as their own contributions plus interest. The current system creates a grous of winners and losers, and the winners are those who have both long careers and high back-end salaries. The people who fit that “winner” profile are disproportionately men.

Pensions are often billed as especially beneficial to women -- and, if a teacher were to spend the entirety of her career in the same system, she would earn a comfortable retirement. But we know that this isn't the case for the majority of teachers. In pensions as well as salaries, women are losing out to men.