Resources

  • Half of today's new teachers will not stay in a single pension system long enough to qualify for even a minimal pension benefit. Instead, they'll face thousands of dollars in lost compensation in the form of forfeited employer contributions.
  • Due to backloaded pension structures, teachers must work many years before their future benefits exceed the value of their required contributions. In the median state, teachers must serve at least 25 years to receive a pension worth more than their own contributions.
  • There a number of myths surrounding public pensions and defined contribution plans. In this report, Josh McGee uses empirical evidence to debunk common claims around the supposed structural efficiencies of traditional public pensions.   
     
    What are common claims about traditional defined benefit plans (DB) versus defined contribution plans (DC)? Critics often claim that DB plans achieve better investment returns at lower fees and are better for worker retirement security because DB plans offer annuities.
  • In terms of retirement benefits, now is the worst time in at least three decades to become a teacher. After years of expansion, a number of states enacted legislation cutting benefits for workers in response to financial pressures. The cuts fall hardest on new and future teachers, particularly for teachers hired after the recession who do not plan to teach in the same state for 30 or more years.

  • A report from author Andrew Biggs finds that transition costs should not prevent state or local governments from closing old pension plans and switching to a defined contribution, cash balance, or other hybrid plan.