Teacher Pensions Blog

There’s a lot of misinformation circulating around pensions. To cut through the noise, the National Council on Teacher Quality (NCTQ) and StudentsFirst released a new fact sheet that debunks the most common pension myths. Here are some highlights that the paper addresses:    

  • Mythbuster #1. While many assume that traditional pension plans provide all teachers with a secure retirement, the reality is only 20 percent of new teachers are estimated to stay in a single system long enough to earn full benefits. Even teachers who work a full career, but who move accross states, face steep penalities. 
  • Mythbuster #3. While there is the risk of investment loss in 401ks, traditional defined benefit pensions aren’t without risk. Teachers face attrition risk—or the risk that a teacher will leave before receiving adequate retirement benefits—when they enter into their state or local plan. Life's planned and unplanned events make the odds of staying in a single system slim.  
  • Mythbuster #5. The pension vs. 401k debate creates a false binary. Defined contributions or 401k-type plans aren’t the only alternative to traditional defined benefit plans. Other alternatives exist such as a cash balance or hybrid plans can offer teachers more secure and portable benefits.

Check out the full fact sheet to read about all eight pension myths and what the data and research really say.