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.
A recent GAO report found that, from 2006 to 2017, WMATA’s required employer pension contributions increased an annual average of 18.9 percent -- from $25 million in 2006 to $168 million in 2017. During that same time period, salaries and wages increased only slightly -- an annual average of 1.1 percent. Today, WMATA’s pension system has a $1.1 billion unfunded liability. That’s in addition to $1.8 billion in health care obligations.
The repercussions of this are fairly alarming. Metro Board Chairman Jack Evans told the Washington Post, “In five to 10 years, the amount of money that we have to pay out of the operating budget to fund the pension will be so high that we won’t be able to run the system.”
For their part, the GAO recommends WMATA first develop a comprehensive assessment of their pension plans’ risks, presumably to inform future actions.
The benefits squeeze on current employee wages is mirrored in the teacher workforce. As states funnel more resources toward unpaid pension debts, there’s less funding to increase salaries of existing employees.