New Denver pension study finds similar problems as Ohio
Gadfly readers will recall last June's much-debated Thomas B. Fordham Institute study, Golden Peaks and Perilous Cliffs: Rethinking Ohio's Teacher Pension System, which called for overhauling the State Teachers Retirement System (see here). In its wake came more reports of pension problems nationwide (see here and here for recent examples). The latest entry is a report issued by the Piton and Donnell-Kay Foundations examining the Denver Public Schools teacher pension system. This report found similar problems as those facing Ohio and provided recommendations similar to those in Golden Peaks and Perilous Cliffs. Misery may love company but, unfortunately for teachers, schools, and taxpayers, this is not the kind of "me-too" situation you like to see.
The Denver study does not delve into costly concerns like retiree health-care benefits, legacy costs, and unfunded liabilities. Instead, the researchers look at the impact the pension system has on recruiting and retaining high-quality teachers in the Denver Public Schools (DPS). The researchers concluded that the DPS pension system works against recruiting the best and brightest into the district, makes it more difficult to attract mid-career professionals from other locales and professions, and hurts the district's efforts to retain its most valuable senior educators.
Denver's pension system is structured like others around the country, and it is fair to assume that pension systems elsewhere have a similar negative impact on district efforts to recruit, hire, and retain the best teaching force possible. In this vein, Fordham's report concluded that "Ohio's pension system almost certainly hinders rather than helps in the recruitment and retention of a highly qualified teaching workforce."
To their credit, when they saw the report DPS leaders acknowledged that they need to take a closer look at their pension system and its impact on its teaching force (see here). In contrast, leaders of Ohio's State Teachers Retirement System have refused even to acknowledge fundamental challenges let alone consider possible solutions (see here). Meanwhile, they seek new spending from districts and teachers alike (see here).
Read: DPS Employee Compensation: the Role of Pension Benefits, by Sari Levy, Van Schoales, and Tony Lewis, March 17, 2008.