If you happen to stumble across the website TeacherPensions.org, you might think it is a website advocating for the retirement security of public school teachers. You would be wrong. TeacherPensions.org is a project of Bellwether Education Partners, an “education reform” organization that is hostile to traditional public schools, their teachers, and the pensions those teachers earn. The figurehead behind TeacherPensions.org is Chad Aldeman, who has apparently made it his mission to eliminate pensions for teachers and other education professionals.
Aldeman’s gimmick is distorting the numbers to make it seem like teachers don’t benefit from pensions. The most common way he does this is to take the entire number of people who spend time teaching, including those who only teach for one, two, or three years, and say that most teachers don’t benefit from pensions because they don’t stay in the system long enough. In one way, he’s right: defined benefit pensions aren’t designed to award the maximum benefit to short-term teachers, but this doesn’t mean that most teachers don’t benefit from pensions.
Teaching is a challenging profession. Some people participate in programs like Teach for America only intending to teach for two or three years, never planning to make it a career. Others may teach for a few years and realize it is not the right fit for them and they leave to pursue other opportunities. Some people just decide they want (or need) to earn more money in the private sector and they leave teaching even if they enjoy it. These are all perfectly valid reasons for short-term teaching.
One of the powerful effects of defined benefit public pensions is the retention effect. Defined benefit pensions are a workforce management tool. They are meant to do three things: recruit, retain, and retire (a different version of the three R’s that teachers teach). Certain public sector professions, particularly policing, firefighting, and teaching, require long training periods and a lengthy amount of time before these public servants reach their peak effectiveness. Some studies have estimated it takes a teacher five years to reach their maximum classroom effectiveness. For policing and firefighting especially, there are also large sunk costs that go into training these individuals (one study estimated it costs $240,000 to train one new police officer). The public wants to make sure it gets a good return on investment for training these individuals and that means keeping them in their profession after they reach their peak effectiveness.
A recent study from the University of California-Berkeley Labor Center found that after that initial teaching period, the majority of teachers who stay in the classroom will teach for twenty years or more. One of the most revealing charts in the study shows that teachers leaving the profession largely follow the path of their eligibility to receive their pension benefit. After that early period of churn, few teachers leave during the middle part of their careers. Teachers begin retiring in greater numbers as they get closer to their eligibility for their full retirement benefit. This is how it is supposed to work. Recruit, retain, retire.
Chad Aldeman and his fellow anti-pension ideologues deliberately distort this data because they don’t want to admit that pensions work. NPPC has no position on charter schools and the relative merits of charter schools versus traditional public schools. But what is clear from the rhetoric of the anti-pension crowd is that they are hostile to defined benefit pensions because they want to undermine the traditional teaching workforce. They want more turnover and more churn so that individual teachers are more expendable. They don’t want teachers staying in the classroom for twenty or thirty years. For reasons known only to them, they are trying to deprofessionalize teaching.
One could argue they have some valid criticisms. Some teacher pension plans have a ten year vesting period. This means that a teacher must teach for ten full years before they are entitled to their full pension benefit. Do you think a ten year vesting period is too long? Then advocate for shortening it to five years, don’t advocate for eliminating the pension plan altogether. Do you think short-term teachers should get more of a pension benefit? Then perhaps you could push for a graduated vesting schedule, where people are entitled to more of their pension benefit the longer they stay. For example, you could vest at 50% after three years, 75% after five years, and 100% after seven years.
Even teachers who leave before fully vesting don’t leave with nothing. Teachers are required to contribute to their pension plan. In many cases, they are required to contribute a much higher percentage of their salary than most people working in the private sector contribute to their 401(k). Behavioral economics tells us that this forced savings is good for most people because most people are terrible at saving. Teachers who leave before vesting are always eligible to get back their own contributions, sometimes with interest. If they leave to teach in a different state with a different pension plan, most of the time they can transfer their pension benefit to the new plan. Even if they leave teaching completely, they will take with them a nice amount of savings for retirement, which they could rollover into an IRA or other retirement plan.
In the aftermath of the Great Recession, many anti-pension ideologues proclaimed, like Chicken Little, that the sky was falling and that public pension plans were on the verge of collapse. Professor Joshua Rauh of Stanford even famously predicted the “exhaustion dates” of several large public plans. Not surprisingly, none of these pension plans have collapsed or been exhausted. In much the same way, critics of pension plans for teachers distort the numbers to create the false sense of a crisis. Pensions benefit teachers by enabling them to retire with security and dignity. Pensions also benefit the public by keeping experienced, effective teachers in the classroom. The cost of teacher turnover is high and pensions help to reduce these costs. There are already teacher shortages in the majority of states and the number of people training to become teachers has dropped in the last decade. Anti-pension ideologues like Chad Aldeman make it harder to reduce these shortages and recruit new teachers with their constant, misleading attacks on the pension benefits of teachers. If we are going to maintain a robust teaching workforce to educate future generations, then we must protect the pensions of teachers from these attacks.