Today is National Teacher Appreciation Day. Here at NPPC we appreciate teachers everyday and the valuable contributions they make to our communities. However, today, let’s take a look at how teachers benefit from the security of a defined benefit pension.
Offering a defined benefit pension is a proven way for schools to recruit and retain quality teachers. Many teachers value the reliability of a pension after a 25 or 30 year teaching career. By keeping teachers in the profession for longer, pensions can help schools save valuable money by reducing costly teacher turnover. Furthermore, teacher quality improves greatly in the first few years of teaching so pensions also help keep more experienced, high-quality teachers in the classroom.
Pensions are also the best way for teachers to save for retirement. A recent study from the University of California-Berkeley found that defined benefit pensions are a better value than defined contribution 401(k)-style plans for most teachers. Pensions provide a higher level of retirement income than a 401(k)-style plan would. According to the study, 86 percent of California teachers are better off with a pension than a 401(k)-style plan.
Our own research has shown the value of defined benefit pensions for teachers. We released a report earlier this year looking at teacher pensions in Oklahoma. We found that offering a pension can help alleviate the effects of a severe teacher shortage. Despite low pay and ongoing cuts to per-pupil education spending, the opportunity to earn a pension keeps many Oklahoma teachers in the profession.
Teachers contribute greatly to communities across the nation by educating the next generation of citizens. While many teachers face lower pay than they could earn in other professions, the appeal of a defined benefit pension keeps many high-quality teachers in the classroom. As we say thanks to teachers on Teacher Appreciation Day, we should remember that their retirement security is valuable to them- and it should be to us too.