Research: Younger Teachers Shoulder High Burden For Retired Peers

Ten percent of the average teacher’s earnings go toward paying down pension liabilities accrued by their older counterparts, according to a recent paper from the Center for Analysis of Longitudinal Data in Education Research.

More on the research, from U.S. News & World Report:

In a recent paper for the Center for Analysis of Longitudinal Data in Education Research, a team of economists calculated that 10 percent of the earnings for an average public school teacher goes toward paying for pension liabilities accrued on the behalf of prior cohorts of teachers. That’s money they could be taking home in salary.

The contribution made by younger teachers is so high in part because their more experienced counterparts shoulder very little of the burden. States have increased vesting periods and employee contribution amounts for new teachers while leaving the plans for current retirees constant. A recent report by Bellwether Education Partners showed that these and other changes disproportionately affect younger and future teachers compared to those who have already worked for several years.

Reductions in compensation for young teachers are only making a longstanding problem worse. Teacher pension systems already transferred money from younger to more experienced teachers before these systems became underfunded.

Read the full paper here.

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