Blog: Funding

Teachers in the Oakland Unified School District may go on strike soon. While they are primarily concerned with stagnant base salaries and class sizes, teachers in Oakland should also be concerned with rising benefit costs.
New York's teacher pension plan earns plaudits for its financial responsibility, but the way it accomplishes that has downsides as well.

Roughly 90 percent of all teachers are enrolled in a pension fund. However, each fund has its own rules and set of conditions that determine the overall value of a retired teacher's annual benefit. Interested in data on the average teacher pension in your state?  See the chart below for the latest data, updating an earlier post!  

The first column shows the “average pension” for newly retired teachers from the past ten years in each state. In the majority of states that don’t list the average benefit for newly retired members outright, these data are retrieved from states’ observations about retirees and beneficiaries added to the retirement plan’s rolls and about new benefit payments added to the rolls. These data are based on 2016 figures unless otherwise noted. Keep in mind that this method is not completely precise– these numbers also include beneficiaries added to the rolls because their spouses passed away, as well as potential increases in benefit payments due to inflation adjustments.

The next column shows, among all newly retired teachers, what the median retiree earns. The third column shows the average pension for all current retirees and beneficiaries. Finally, the last column show the estimated percentage of new teachers who will actually receive a pension. The data come from each state's annual comprehensive financial report.  

In Maryland, for example, the “average pension” for new teachers is $24,409. But the median pension for new retirees is just $16,404, meaning half of all new retirees earn less than that amount. Moreover, 57 percent of new Maryland teachers are expected to leave the system before qualifying for a pension.

 

 

Average Teacher Pension by State

State

Average Benefit for New Retirees

Median Benefit for New Retirees

Percentage of New Teachers Who QUALIFY FOR a Pension

Alabama

$22,335.81

$22,512.00

39

Alaska (DB plan)

$34,605.15

As teachers in Los Angeles prepare to strike, the district is spending a rapidly rise share of its budget on employee benefits, rather than hiring more teachers or paying existing teachers teacher salaries.
Teacher pension plans are regressive, and Democrats are often the ones fighting to preserve systems that deepen financial inequities.
In schools across the country, high teacher pension and benefits costs can crowd out other classroom spending. In Washington D.C., pension costs could pump the brakes on Metro services.
Without looking at all forms of compensation or adjusting for cost of living, average teacher salary rankings don’t tell us all that much.
A new report finds that district spending on benefits has grown at a rate that far outpaces the district's overall spending on K-12. As a result, benefits take an increasingly large bite out of district education budgets.
This blog describes how teacher pension plans work.
Even with district wide salary schedules, women earn less than their male colleagues. Although there is no single explanation, in this piece I look at the impact of differences across grade levels.