Redefining Teacher Pensions: Strategically Defined Benefits for New Teachers and Fiscal Sustainability for All
Cast a net into the sea of folks eager to reform teacher-pension plans and you’ll draw up quite an eclectic catch—from those with a goal of increasing the financial stability of state education budgets to those who wish to ensure equity in teacher-workforce distribution. Just as Fordham’s recent “Halting a Runaway Train” report exemplifies the former, this Center for American Progress paper speaks to the latter. In it, author Raegen Miller explains that “teacher pension policy should help attract to teaching especially promising college-graduates and career-changers” and well as “encourage especially effective teachers…to work in the schools with the greatest need.” To reach these ends, Miller offers three recommendations. The first two—amend state constitutions to rigorously scrutinize any benefit-enhancing legislation and amend ESEA to withhold states’ Title I funding if they fail to contribute to their pension systems—are meant to ensure that teachers continue to receive benefits under current defined-benefits plans. The third—implement a cash-balance defined-benefit pension plan—would draw more promising talent to the teaching profession, as it would ensure a steady accrual of pension wealth, distributed evenly over a person’s years of service. It would also allow teachers to move across state lines (perhaps to needier schools) without pension penalty. States fishing for new pension-plan options, but unable to go whole hog for 401(k) style options, would be wise to tap the cash-benefit-plan fishing hole. This paper can show the way.
Raegen T. Miller, “Redefining Teacher Pensions: Strategically Defined Benefits for New Teacher and Fiscal Sustainability for All,” (Washington, D.C.: Center for American Progress, September 2011).
blog comments powered by Disqus