Chew 'em up, spit 'em out

Most Teachers Will Never Collect a Pension

By Diane Ravitch

Stephen Sawchuk reports in Education Week on a study finding that most teachers will not stay on the job long enough to collect a pension.

He writes:

“The report from Bellwether Education Partners, a Washington-based consulting group, contends that states’ current defined-benefit pension policies, which pay out according to a fixed formula, are not well aligned with a profession that has grown rapidly younger and more mobile. And that could put teachers at serious financial risk later on in their lives.

“For the paper, analysts Chad Aldeman and Andrew Rotherham used “withdrawal” tables—state estimates on teacher-turnover rates—to estimate the percentage of teachers who will earn a pension in every state. They drew on each state’s assumptions for female teachers aged 25 who began teaching after Aug. 1, 2013. (Keep in mind that the state formulas are different for male teachers or those of other ages, and these stats would look different for them.)

“Based on those assumptions, only 45 percent teachers in the median state will qualify for payouts, a process that typically takes 5 years. And only 20 percent will reach the normal retirement age of 58.

“That’s a lot of money left on the table. Many teachers won’t even meet the vesting requirements. 

And for those that don’t, states typically allow teachers to take only the contributions they made into the pension plan if they leave the profession, or move to another state. “

Of course, many states are trying to ditch defined benefit pensions altogether.

And it must be noted that one of the implicit goals of the current “reform” movement is to encourage teacher turnover, specifically to reduce future pension costs. That’s not good for the teaching profession or for children or for education, but it helps cut costs.