About Teacher Pensions

Mobility and Portability

While the teaching profession is evolving and becoming more transitory, pension systems have gone in the opposite direction. Public-sector defined benefit retirement plans have a number of structural elements that negatively affect an increasingly mobile teaching work force. And rather than being revamped as mobility has increased, many pension plans have instead been modified to even more heavily favor full-career teachers and those who are committed to staying in one state or school district.

States have created rules to make it more difficult for teachers to earn pension benefits at all. By enforcing longer “vesting periods” and creating new, less generous plans for younger teachers, fewer teachers will share in the promises of the pension plans. Today, more than half of all beginning teachers will not vest into their state pension plan.

The problems do not just adversely affect people who choose to leave teaching altogether. Substantial penalties for mobility within the teaching profession affect tens of thousands of teachers every year who move between states or districts for personal or professional reasons. These teachers lose out because current public-sector defined benefit pension systems are heavily biased toward teachers with longevity and stability. To put it in simple terms, teachers can lose more than half of their pension wealth just for moving one time; if teachers move multiple times—if, for example, their spouse was in the military—the losses would be even greater.