Teacher Pensions

Cory Koedel and Michael Podgursky

from Elsevier

Abstract: Most educators in the United States receive retirement compensation via a subnational defined-benefit pension plan. These plans exert strong “pull†and “push†incentives over the course of the career and concentrate teacher retirements at relatively early ages compared to other professions. They also impose sharp penalties on geographically mobile teachers. Teacher pensions are a large and growing cost of public education. There are several reasons for the rising costs, but the biggest reason is that the unfunded liabilities of most plans are growing. The growth in unfunded liabilities is facilitated by the decoupling of contributions and benefits at the individual level, and represents a shift of wealth from young to older teachers in the United States. In response to fiscal pressures, some states are changing their plans, primarily for new teachers.

Keywords: Teacher pensions; Defined-benefit plans; Retirement; Cash-balance plans; Public educators (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:educhp:v:5:y:2016:i:c:p:281-303

DOI: 10.1016/B978-0-444-63459-7.00006-3

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