A modest proposal for pension reform

Robert M. Costrell , Michael Podgursky / March 30, 2011

The state budget deficit and collective bargaining reform are consuming much of the energy at the Statehouse, but legislators are also considering much-needed fixes to the state’s public pension systems. The authors of this piece also wrote the Fordham Institute’s 2007 report, Golden Peaks and Perilous Cliffs: Rethinking Ohio’s Teacher Pension System, and in this article share their most recent research and recommendations about improving teacher pension systems.

Educator pension systems are becoming increasingly expensive and, in a number of states, plagued by severe problems of underfunding. Given concerns about cost and long-term sustainability, several states have cut benefits, usually for new teachers, and many more are considering doing so. However, in making these changes, policymakers should carefully consider their labor-market effects. Some of the proposed cuts reproduce—and even exacerbate—undesirable features of current systems.

That’s because they violate the paramount principle upon which pension systems should be built: Benefits should be tied to contributions. In other words, benefits paid to any teacher should be tied to the lifetime contributions made by or for that teacher. If $300,000 has been contributed on behalf of a teacher (including accumulated returns) then the cash value of an annuity provided to this teacher should also be $300,000.

This principle is routinely violated in current defined-benefit pension systems. Our analysis, Reforming K-12 Educator Pensions: A Labor Market Perspective, shows that the current systems result in very large implicit transfers from young teachers working short teaching spells to “long termers” who spend entire careers in the same system. In our view, a teacher who works ten years or thirty years should accrue

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A modest proposal for pension reform

The MetLife Survey of the American Teacher: Preparing Students for College and Careers

Daniela Fairchild / March 30, 2011

Earlier this month, MetLife released the findings of Part I of their annual education survey, which focuses on what it means to be “college and career ready.” The survey polled middle and high school teachers, students, parents, and Fortune 1000 executives to determine how they feel about the college and career-readiness goal and what students need to do to reach it. Major takeaways from the survey include the following:

• There is strong agreement among stakeholder groups that every high school student should graduate college and career ready. The difference among those polled arises in the amount of priority they place on this issue. For example, 54 percent of teachers believe this is a priority compared to 73 percent of parents.  
• Students’ expectations for going to college have increased in the past two decades. In 1988, 57 percent of students said it was likely they would go to college, as compared to 75 percent of students who believe that today.
• A majority of students believe that their school does a good job of fostering a college-ready environment. On the contrary, parents and executives believe that schools could do a better job to inform students of the necessary steps to go to college.

While there is broad agreement that all students should be ready for college or a career when they graduate from high school, there is significant discord around various reform efforts being taken to achieve this goal. For example, when asked how much control schools should have to remove underperforming teachers, seventy-five percent of parents show strongest support for “giving schools more ability

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The MetLife Survey of the American Teacher: Preparing Students for College and Careers

A Smarter Teacher Layoff System: How Quality-Based Layoffs Can Help Schools Keep Great Teachers

Chris Irvine / March 30, 2011

Moving from quality-blind to quality-based layoffs is integral to today’s education-reform agenda. Yet figuring out how best to pull this off in a productive, teacher-friendly manner has been a whopping challenge. Enter this New Teacher Project (TNTP) brief, which offers a novel method for districts engaging in quality-based layoffs. Based on a survey of 9,000 teachers from two large, urban districts, TNTP presents a “scorecard” of weighted factors that the organization (as well as the teachers it surveyed) believes should be considered in layoff decisions. This scorecard includes teacher performance ratings, classroom-management skills, attendance, and support for extra-curricular activities—along with years with the district. (Conspicuously lacking is credit for graduate credit hours and advanced degrees: Only one-third of surveyed teachers supported including this factor in layoff decisions.) TNTP’s brief offers a method for handling layoffs that is both tangible enough to be implemented and flexible enough to be adapted for district need. The one caveat: While the brief’s workable model for making layoff decisions is an excellent first step, it does not go further to address how teachers’ performance and classroom-management skills should be judged—probably because their surveyed teachers counted principal opinion as the least appropriate factor for making layoff decisions.

A Smarter Teacher Layoff System: How Quality-Based Layoffs Can Help Schools Keep Great Teachers
The New Teacher Project
March 2011

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A Smarter Teacher Layoff System: How Quality-Based Layoffs Can Help Schools Keep Great Teachers

Going Exponential: Growing the Charter School Sector's Best

Janie Scull / March 30, 2011

The authors don’t beat around the bush: Bad charters may exist, but so do excellent ones—and the latter should be supported and scaled to serve exponentially more students. If the top 10 percent of charter schools expanded at a rate similar to other growing industries, we learn from this PPI study, they could reach all children in poverty by 2025. To do so, the authors offer recommendations on how to overcome current practical, political, and environmental barriers to growth, borrowing strategies from businesses and organizations like Apple, Habitat for Humanity, and Starbucks. First, they advise that the top charter providers rid themselves of their “pervasive fear of growth”; leaders should commit not just to excellence, but to excellence for increasing numbers of students. Other suggestions include: negotiating performance-based funding in contracts; ramping up efforts to import talent from other industries and cultivate it in the education sector; extending the reach of the best teachers through technology and innovation; providing incentives and rewards for leaders who achieve successful growth; and aligning with other similar organizations to share ideas and resources. While some may balk at the stark comparison between the education sector and other (largely for-profit) industries, this brief may prove to be the shot-in-the-arm that the charter sector needs to cure it of its complacency and timidity. The report serves less as a blueprint for development and more as a call to arms for top charter providers, and as the title implies, the possibilities are exponential.

Going Exponential: Growing the Charter School Sector’s Best
Progressive Policy Institute
Emily Ayscue Hassel, Bryan C. Hassel,

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Going Exponential: Growing the Charter School Sector's Best

LIFO, teacher bonuses, and good edu-reading

Nick Joch / March 30, 2011

• With all the collective bargaining hullabaloo of late, it’s hard to imagine a more opportune time for the release of Terry Moe’s new book, Special Interest: Teacher Unions and America’s Public Schools. Weighing in at over 500 pages, the hefty Brookings Institution Press volume goes in depth on the causes and consequences of teacher unions’ power in America’s schools, as well as the long-term sustainability (or not) of that power. Fordham’s own Checker Finn reviewed the book here.
• “Save great teachers” is the tag line of “How layoffs hurt students,” the latest video from Michelle Rhee’s Students First advocacy organization. The two-minute video gives a brief but vivid introduction to LIFO, then explains the inadequacies of LIFO and encourages viewers to petition their elected officials to end it.
• The top ed policy minds and hottest ed policy issues come together in the PIE Network’s latest publication, Schools in High Gear: Reforms That Work When They Work Together, a compilation of essays on topics like school performance, teacher quality, and education funding. Among the contributors are Fordham’s own Checker Finn and Mike Petrilli, with articles on academic standards and school choice policies, respectively.
• Are bonuses a useful tool for encouraging the best teachers to work in “challenging schools”? The Center on Reinventing Public Education’s latest report, What Does Washington State Get for Its Investment in Bonuses for Board Certified Teachers? tackles the question head-on. According to the report, Washington’s bonus system encouraged more teachers to get certified, but few certified teachers are going to the

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  LIFO, teacher bonuses, and good edu-reading