Few Reach the Peaks: How to Fix Colorado’s Teacher Pensions

Chad Aldeman and Michelle Welch
Publication Date: 
January 2015

Eighty-five percent of Colorado teachers and other school employees will leave public employment with insufficient retirement savings and no Social Security benefit for that work.

In addition to impacting teachers and other school employees’ ability to save for retirement, the growing burden of pension costs in Colorado also takes money out of classroom.

By 2020, Colorado’s school districts will be forced to contribute more than 20 percent of their employee salary costs to the state pension plan.

Yet much of that increase will not benefit current employees. According to the report, “In 2013, for every dollar that school districts were required to contribute to the pension fund, only 16 cents went to paying the actual cost of benefits earned by workers in that year.” The rest of the money went to pay down the state’s $26 billion unfunded liability.

The report discusses not only the inadequate retirement savings of young teachers who leave the system, but also mid- and late-career employees who are penalized by the structure of the current system.