Here at TeacherPensions.org, we know pensions can be complicated. Thanks to teachers and their family members finding our site as they search for information about how pension rules affect them, 2019 was another banner year for our traffic figures. We aim to help teachers understand how their benefits work through simple, clear explanations.
As we look back on 2019, pensions and other employee benefits continued to eat into teacher salaries, and new research documented the ways pensions affect teachers, schools, and students. To recap the year in pension analysis, here's a list of our most popular work from 2019:
10. How Teacher Pensions Exacerbate Inequities in Rural and Urban School Districts: Pension plan benefit formulas typically depend on two main variables--salary and years of experience. Teacher pension plans in particular tend multiply those variables to determine benefits for all educators across an entire state, but teachers and school district resources are not equitably distributed across states. This piece found that rural districts, with lower salaries, and urban districts, with higher staff turnover, receieve lower pension benefits compared to educators in suburban schools.
9. Technically Speaking, Ohio School Districts Don't Contribute to Ohio Teacher Pension Benefits: In Ohio, school districts are contributing 14 percent of each teacher's salary toward the state pension plan. However, all of that money is going to pay down the pension plan's unfunded liabilities. In fact, a portion of Ohio teachers' own contributions are also being spent on the pension plan's unfunded liabilities. Crazy as it may sound, the average Ohio teacher is getting back less from the pension plan than they themselves are putting into it.
8. For Most Teachers, Vesting Periods Don't Matter: Under most retirement plans, employees begin to qualify for employer-provided retirement benefits once they reach the plan's vesting period. But under pension plans, like those offered to most teachers, merely qualifying for a pension does not necessarily translate into much of a benefit, particularly for younger workers. For teachers who begin their careers before age 45 or 50, vesting won't matter at all; they may even be better off withdrawing their funds immediately than waiting to collect a benefit when they retire.
7. Insufficient: How State Pension Plans Leave Teachers With Inadequate Retirement Savings: In the retirement world, it's common to hear people assume that workers who are covered by a pension plan are better off than workers with other types of retirement plans. That perception is doubly true for teacher pension plans. But in this piece, we found that a new, young teacher in a typical state would have to stay for 28 years before qualifying for an "adequate" retirement benefit. Teachers who fall short will have to work longer, save more in their personal accounts, or rely on other forms of income in their retirement years. There are cost-neutral plan design options that would put all teachers on a path to a secure retirement.
6. New Actuarial Study: Good News for Teachers, but With a Price Tag for States: Teachers are living longer, and the average retired teacher can expect to live to 88 or 90 years old, depending on their gender. While these new actuarial findings may come as good news for teachers and their family members, they do come with a cost for state pension plans.
5. California's Hidden Pension Gap: State Spending on Teacher Pensions Exacerbates School District Inequities: As with the #10 story highlighted above, this piece found that wealthier school districts in California benefited slightly more from the state's investments in teacher pensions than poorer districts did. Less-needy districts – those with fewer low-income, English learner, and foster youth students – benefit more because their teachers have higher salaries.
4. Teacher Pension Plans: How They Work, and How They Affect Recruitment, Retention, and Equity: In this easy-to-read PowerPoint slide deck, we look at the history of teacher pension plans and how they interact with key education issues facing our schools today, including attracting and retaining high-quality teachers and providing equitable resources for disadvantaged students.
3. Social Security, Teacher Pensions, and the “Qualified” Retirement Plan Test: In 15 states and the District of Columbia, public school teachers do not participate in Social Security. While working in those states, teachers neither contribute nor earn benefits toward the nationally portable, progressive benefit structure that many Americans depend on. Although there are federal rules designed to protect those workers, we find that those rules fail to protect many short- and medium-term workers who leave their service with only minimal retirement benefits.
2. Update: What is the Average Teacher Pension in My State?: In 2019, we updated one of our most popular pieces of all time--a 2016 post looking at the "average" teacher pension in each state. In the new version, we updated the state figures, provided additional context, and added new features to improve the user experience. Although knowing the “average" pension in each state can be interesting, we caution that it may not reflect the amounts many teachers actually earn.
1. At What Age Do Teachers Start Teaching?: Our most popular post of 2019 provides data on the average age teachers begin their careers in each state. While a teacher's age may not affect their teaching ability, age is an important factor when it comes to calculating teacher pension benefits. Because teacher pension formulas are based on a teacher's salary in the last year they taught, regardless of when that took place, pensions offer greater rewards for late-career service than than they do for the same years performed earlier in the teacher's career. From a policy standpoint, it may not make a whole lot of sense to prioritize some teachers over others. But that's exactly what teacher pensions do.