Chad Aldeman and I have a new paper out today about teacher pensions, Friends Without Benefits (pdf). It looks at how the current approach to teacher pensions works in the context of broader retirement security issues.
If you’ve followed our work on teacher pensions you know that we see the fiscal problems facing teacher pension plans as a result of bad decisions by state policymakers and a corresponding lack of fiscal discipline as well as ill-considered benefit enhancements. Shoring that up is a fiscal sustainability issue. But there are also a broader set of design questions given what we know about the changing teacher workforce. Friends Without Benefits is about those design issues and the impact they have on America’s largest class of B.A. workers.
In Friends Without Benefits we use state pension plan data to estimate how many teachers will qualify for at least a minimal pension benefit. Overall fewer than one in five teachers will stay long enough to reach their normal retirement age. But it varies, for instance,