About Teacher Pensions

Retirement Insecurity

Saving for retirement is a nationwide problem—numerous studies warn that American households will not have enough savings to retire comfortably. In the private sector, individuals have been mainly left on their own to make retirement savings decisions. They have decided whether to participate in their employer’s retirement benefits, they decided how much to save, and they decided where to invest. Public policies set savings limits and basic rules for individuals, but ultimately individuals have been left to make their own decisions.

The failure of retirement saving in the private sector, then, is a result of wage stagnation, poor individual habit and decisions, and an absence of strong public policies supporting positive saving habits, such as automatically enrolling workers in 401(k) plans or matching contributions of low- and middle-income workers.

The story is the exact opposite for state and local government workers like public school teachers, where retirement insecurity is largely a problem resulting from poorly structured policies that have been put in place over the last few decades state by state and city by city.

This should be a national concern, because teachers are the largest class of workers in the country. There are more public school teachers in the U.S. than retail salespersons, cashiers, or secretaries and administrative assistants. Teachers are often compared to professions with similar educational levels like nurses or social workers, but public school teachers are as large of a group as those two professions combined, and teachers are the single largest class of workers with bachelor’s degrees or higher. We should not only want to help teachers save because of the valuable work they do, but because they are a vital part of our national economy. And if we expect teachers, especially younger teachers, to save for retirement we should not systematically take steps in public policy that run counter to their efforts.