Findings Debunk Inaccurate & Misleading Assertions about Teacher Pensions
WASHINGTON, D.C., October 26, 2017 – A new report finds that defined benefit (DB) teacher pension plans work for both schools and teachers, and that there are important policy reasons to continue offering these retirement plans. The research indicates that pensions are unique in that they provide a financial incentive for teachers to stay on the job. As a result, schools have more experienced teachers in the classroom, which ultimately benefits students and education.
These findings are contained in new research from the National Institute on Retirement Security (NIRS), “Win-Win: Pensions Efficiently Serve American Schools and Teachers.” The research is authored by Dr. Christian Weller, professor of public policy at the University of Massachusetts Boston.
Download the full report here.
The research debunks false claims about defined contribution (DC) 401(k)-type plans and sets the record straight that pensions offer important incentives to retain experienced teachers while providing the best path to retirement security.
“The evidence is clear that pensions are a win-win for schools and teachers” says report author Christian Weller. “Pensions give schools an effective recruitment and retention tool because these retirement benefits provide a pocketbook incentive for teachers to stay on the job. This financial incentive is all the more important given that wages have eroded for teachers, which makes it harder for schools to keep experienced teachers. Schools and students benefit because teachers become better at their jobs with more experience.”
“Our nation’s schools face a growing shortage of teachers, and U.S. teachers are paid on average as much as 60 percent less than similarly educated professionals across the globe,” says Diane Oakley, NIRS executive director. “Pensions play an essential role in recruiting and retaining our best and most experienced teachers. It’s critical that states continue to leverage the magnetic effect of pensions to keep teachers in the classrooms and empower students to achieve their highest potential.”
School districts typically offer teachers a pension as part of their total compensation. The research finds that pensions: • Give employers an effective recruitment and retention tool due to the way pension benefits reward longevity with an employer.