Who Benefits from Pension Enhancements?
Cory Koedel,
Shawn Ni () and
Michael Podgursky
Education Finance and Policy, 2014, vol. 9, issue 2, 165-192
Abstract:
During the late 1990s public pension funds across the United States accrued large actuarial surpluses. The seemingly flush conditions of the pension funds led legislators in most states to substantially improve retirement benefits for public workers, including teachers. In this study we examine the benefit enhancements to the teacher pension system in Missouri. The enhancements resulted in large windfall gains for teachers who were close to retirement when the legislation was enacted. By contrast, novice teachers, and teachers who had not yet entered the labor force, were made worse off. The reason is that front-end contribution rates have been raised for current teachers to offset past liabilities accrued from the enhancements. Total teacher retirement compensation, net of contribution costs, is lower for young teachers today as a result of the enhancement legislation. Given sharp increases in pension costs in other states, this finding may generalize to young teachers in many other plans. © 2014 Association for Education Finance and Policy
Keywords: pensions; public workers; retirement benefits (search for similar items in EconPapers)
JEL-codes: H75 I21 I22 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)
Downloads: (external link)
http://www.mitpressjournals.org/doi/pdf/10.1162/EDFP_a_00128 (application/pdf)
Access to PDF is restricted to subscribers.
Related works:
Working Paper: Who Benefits from Pension Enhancements? (2012) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:tpr:edfpol:v:9:y:2014:i:2:p:165-192
Ordering information: This journal article can be ordered from
https://mitpressjour ... rnal/?issn=1557-3060
Access Statistics for this article
Education Finance and Policy is currently edited by Stephanie Riegg Cellini and Randall Reback
More articles in Education Finance and Policy from MIT Press
Bibliographic data for series maintained by The MIT Press ().