Statewide defined benefit pension plans, which today serve 90 percent of public school teachers, were originally justified on the grounds that pension plans were ideally suited to the needs of long-term female employees. They had all-or-nothing provisions such that a 19-year veteran got nothing, but a 20-year veteran earned a comfortable, although certainly not lucrative, retirement. Over time, teacher pension plans have improved somewhat, but they are still heavily tilted toward long-term employees.
Teacher pension funds across the country are in trouble. They are hundreds of billions of dollars in debt. To make ends meet, many states have raised the vesting period and increased how much teachers have to contribute to their retirement. Despite these changes, state pension funds fail to provide all new teachers with sufficient retirement benefits.
New Jersey’s pension systems are some of the worst-funded in the United States. The Rockefeller Institute of Government at the State University of New York classifies a government pension system that is below 40 percent funded as in "crisis.” New Jersey’s system is well below that mark. A combination of elected officials granting retirement benefits to workers without having the means for them and public-employee groups negotiating increased benefits when there was no funding source led to this situation.