Today NPPC released a new report showing how teacher pensions help alleviate the severe teacher shortage in Oklahoma. The report- “Retirement Security Often Overlooked in Conversation Around Teacher Shortage”- finds that offering the security and reliability of a defined benefit pension is a proven way to recruit and retain quality teachers. Unfortunately, Oklahoma lawmakers are now debating legislation that would close the teacher pension plan and force new teachers into an inadequate 401(k)-style system. This would only exacerbate the teacher shortage crisis. Instead, lawmakers must maintain retirement security for Oklahoma’s teachers while looking at ways to stabilize revenue and boost pay.
As in Kansas and Louisiana, Oklahoma is currently experiencing a budget crisis due to a revenue failure caused by misguided right-wing tax policy enacted several years ago. Rather than reverse course on this failed tax policy, Oklahoma legislators have decided to cut the state budget to the bone. This has resulted in a series of harsh cuts to education spending in the state. Oklahoma has cut education spending by more than 15 percent below 2008 levels. That was before a 3 percent cut ordered in December 2015 and an additional 7 percent cut ordered in March 2016. Just last week, Oklahoma City Public Schools announced it would be eliminating 208 teaching positions before the start of the next school year.
The elimination of those positions continues a worrying trend for Oklahoma. The state currently lacks approximately 1000 teachers, despite cutting 600 teaching jobs since the end of the 2014-2015 school year. To fill these vacant positions, the state has issued 1,037 emergency teaching certificates- more than the previous four years combined.
What is driving the teacher shortage in Oklahoma? Low pay and the ongoing cuts to per-pupil educational spending certainly contribute. Oklahoma’s average teacher pay is the fourth lowest in the country and $4,700 less than the average in its six neighboring states. For a first-year teacher, starting pay is only $31,600. Low teacher pay is not something new. Teachers are often underpaid compared to their peers with similar levels of educational attainment. In many cases though, teachers have been willing to accept lower pay during their working years in exchange for the promise of a secure retirement through a defined benefit pension.
A recent report by the National Institute on Retirement Security found that women employed in teaching had higher rates of retirement security precisely because they were more likely to have a defined benefit pension. For Oklahoma’s teachers, the average annual pension benefit is a modest $20,242. This is significantly lower than most of its neighboring states, but still offers educators the reliability of a stable and secure retirement. Unfortunately, for teachers in Oklahoma, the promise of a defined benefit pension may be at risk.
In May 2014, the Oklahoma legislature passed HB 2630, which forced new state employees into a defined contribution 401(k)-style plan. That legislation did not include teachers, but some anti-pension legislators have stated they would like to do the same thing to Oklahoma’s teachers. A dangerous education bill currently moving through the legislature, SB 1187, would, among other things, allow schools to opt out of contributing to the Oklahoma Teachers’ Retirement System. This would be damaging to the retirement security of all Oklahoma teachers.
As our new report makes clear, offering a defined benefit pension is a proven way to maintain a robust, experienced teacher workforce. Any effort to close the teacher pension to new employees or allow schools to opt out of the pension system must be opposed. Oklahoma already faces a number of challenges in educating the next generation of its citizens- it does not need to add to them by gutting the retirement security of its hardworking educators.
Download a copy of the full report here: Oklahoma Teacher Pension Report_FINAL