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ERIC Number: ED509687
Record Type: Non-Journal
Publication Date: 2009-Dec
Pages: 54
Abstractor: As Provided
Reference Count: 31
Distribution of Benefits in Teacher Retirement Systems and Their Implications for Mobility. Working Paper 39
Costrell, Robert M.; Podgursky, Michael
National Center for Analysis of Longitudinal Data in Education Research
While it is generally understood that defined benefit pension systems concentrate benefits on career teachers and impose costs on mobile teachers, there has been very little analysis of the magnitude of these effects. The authors develop a measure of implicit redistribution of pension wealth among teachers at varying ages of separation. Compared to a neutral system, often about half of an entering cohort's net pension wealth is redistributed to teachers who separate in their fifties from those who separate earlier. There is some variation across six state systems. This implies large costs for interstate mobility. Estimates show teachers who split a thirty-year career between two pension plans often lose over half their net pension wealth compared to teachers who complete a career in a single system. Plan options that permit purchases of service years mitigate few or none of these losses. It is difficult to explain these patterns of costs and benefits on efficiency grounds. More likely explanations include the relative influence of senior versus junior educators in interest group politics and a coordination problem between states. (Contains 7 tables, 16 figures, and 40 footnotes.)
National Center for Analysis of Longitudinal Data in Education Research. The Urban Institute, 2100 M Street NW, Washington, DC 20037. Tel: 202-261-5739; Fax: 202-833-2477; e-mail:; Web site:
Publication Type: Reports - Evaluative
Education Level: Elementary Secondary Education
Audience: N/A
Language: English
Sponsor: Vanderbilt University, National Center on Performance Incentives
Authoring Institution: Urban Institute, National Center for Analysis of Longitudinal Data in Education Research (CALDER)
Identifiers - Location: Arkansas; California; Massachusetts; Missouri; Ohio; Texas