In honor of World Teacher’s Day yesterday, we recognized the sacrifices teachers and school personnel make for our communities by sharing some of their stories. Today, we’re going to share why defined-benefit pensions are the best way to ensure they can retire with the security and dignity they deserve after public service.
According to a study the National Institute on Retirement Security (NIRS) conducted with the University of California Berkeley Labor Center that analyzed teacher pensions across Colorado, Connecticut, Georgia, Kentucky, Missouri, and Texas, pensions offer more retirement security than defined-contribution plans like 401(k)s. The research illustrated that pensions provide a higher and more stable retirement income than a 401(k)-style retirement plan for eight out of 10 educators across these states.
Pensions also play another critical part in these educators’ retirement plans because, with the exception of some teachers in Georgia and Texas, most of the teachers in these states do not receive Social Security. This makes their pension their sole source of guaranteed income in retirement.
The same study also revealed that defined-benefit pensions are a crucial tool in recruiting and retaining qualified public educators. “Policymakers should understand that pensions exert a clear retention effect on experienced teachers—lowering teacher turnover, easing schools’ staffing pressures, and contributing to education quality,” the report states. NIRS also showed that two out of three teachers will serve for at least 20 years in their classrooms throughout these states. And, on average, the typical educator will teach for 25 years within the same state.
NIRS’ research illustrates the consequences of converting pensions to defined-contribution accounts for educators. Such a move would threaten teachers’ retirement security and impact state and local governments’ ability to recruit and retain dedicated educators.
On World Teacher’s Day and every day, we celebrate the achievements of teachers and school personnel across the country. We can thank them for their service by protecting their pensions, which guarantee a secure retirement.