Teachers in These 4 States Lose Out Double on Retirement


Leslie Kan is an Analyst with Bellwether Education Partners in the Policy and Thought Leadership practice area. This post was originally published on TeacherPensions.org.

Fifteen states penalize teachers by not providing Social Security coverage. Seventeen states require teachers to serve at least ten years for a pension. But four states have decided to link these two regressive policies together. Connecticut, Georgia, Illinois, and Massachusetts don’t offer Social Security to their teachers and make them wait 10 years to earn even a minimum pension.

Unlike the private sector, states can set the service requirements for a pension as high as they want. Some states have set relatively long service requirements. Failing to meet these service requirements (also called vesting) means a teacher won’t qualify for any benefits at retirement. Connecticut, Georgia, and Massachusetts have for the past several decades required their teachers to serve a minimum of 10 years before offering any benefits at retirement. Illinois recently joined the group by increasing their service requirement from five years to 10.

What does this mean for these teachers? Teachers in these states can teach for up to 9 years without earning any employer-provided benefits. They won’t meet requirements to qualify for a pension. And they also won’t have Social Security to fall back on, because neither they nor their employers contribute to the federal program.

The chart below shows the percentage of new teachers the state assumes will actually qualify for a pension and teach until the plan’s set retirement age.

Teachers in These 4 States Lose Out on Pension Benefits AND Social Security*

State Minimum Service Requirements to Receive a Pension Percentage Who Meet the Minimum Service Requirements Plan’s Retirement Age Percentage Who Will Reach Their Plan’s Retirement Age Social Security Coverage
Connecticut 10 Years 54.8 60 33.6 None
Georgia 10 Years 34.5 55 20.6 Most districts do not provide coverage
Illinois 10 Years 38.0 67 18.5 None
Massachusetts 10 Years 35.6 60 16.6 None

Source: State comprehensive annual financial reports and teacher retirement plans.

The percentage of these “double losers” is shockingly high. In Massachusetts, only 36 percent of all new teachers will meet the minimum requirements to receive a pension. This means that 64 percent of the state’s new teachers won’t get any pension benefits at retirement. And they won’t receive any Social Security benefits. In Illinois, 6 out of 10 new teachers also lose out on pensions and Social Security.

These double losers don’t exist in the private sector. Unlike the public sector, all private sector employers must provide their workers with Social Security benefits. While not all private companies provide their workers with a retirement plan, those that do cannot set service requirements above five years. These states may be cutting corners and saving in the short-term, but their new teachers are paying the ultimate cost.

*Up until 2013, Rhode Island set their service requirements for a pension at 10 years while not offering their teachers Social Security. In 2013, Rhode Island passed legislation that placed new teachers in a hybrid plan with a lower service requirement of 5 years for the defined benefit portion of the plan and 3 years for the defined contribution portion of the plan. While a historic step, Rhode Island could go one step further and offer Social Security to all of their teachers.


Photo by  gfpeck via Flickr CC License

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