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The Urban Institute created an interactive grading tool assessing each state retirement plan. States are graded on seven key criteria: rewarding younger workers, promoting a dynamic workforce, encouraging work at older ages, providing retirement income to short-term employees, providing retirement income to long-term employees, making required contributions, and funding ratio.

The tool allows users to select states by the key criteria, occupation, and hire date. Filtering for teachers, we find that the majority of state plans receive an overall C grade. No state earned an A for its teacher plans, six states received a B grade (AR, DE, FL, NY, OR, WY), and six states received a failing F grade (CT, DC, KY, MA, OH, RI).

Things change, however, for individual criteria. Looking at how often states make their annual required contribution (ARC), most states received an A or B grade. But in terms of funding ratios, only two states received an A. The majority of states received D’s or F’s on their funding ratios, despite getting high marks for paying their required contributions. A state like Rhode Island can get an A in paying their required contributions, but still have large unfunded liabilities and therefore receive an F in funding ratio.

States also scored poorly in providing incentives for younger and older workers. As economists Costrell and Podgursky, the Urban Institute, and others have written, traditional pension systems create little incentive for younger workers to stay in the system and likewise “push” older workers towards earlier retirement. New hires often bear the brunt of pension reforms, which can shift the cost burden of paying for underfunded liabilities to newly hired employees. No state received an A on rewarding new hires; 19 states received an F and 11 states received a D. Twenty-four states push out senior workers and received an F on encouraging work at older ages.

The category where almost all states received an A was retirement income for long-term employees. For a teacher who stays an entire career, the rewards are significant. Forty-one states received an A grade for retirement benefits for career teachers. No state received a grade below a C.

The key takeaway from the new tool is that current state pension plans tend to generously reward career teachers but fall short on incentivizing and rewarding newly hired teachers and encouraging older workers to continue. The grading tool is a useful interactive, and will hopefully be updated for policymakers and researchers to use in the future. The tool is part of the Public Pensions Project, which houses numerous research briefs, facts sheets, and reports on retirement-related issues. Further data charts and information can be found by clicking on individual state plans and the "View Plan Details" icon.