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ERIC Number: EJ1013942
Record Type: Journal
Publication Date: 2013-Apr
Pages: 4
Abstractor: ERIC
ISSN: ISSN-1537-5749
Risking Teacher Nest Eggs: Financially-Troubled Pension Systems Require Change
DeNisco, Alison
District Administration, v49 n4 p50-53 Apr 2013
The U.S. teacher pension system is in major financial trouble, with almost $390 billion in unfunded liabilities, according to a recent report from the National Council on Teacher Quality (NCTQ). And funding shortfalls grew in all but seven states between 2009 and 2012, the nonprofit research and policy group found. Though the current economic downturn is a factor, America's public pension systems--which offer retirement benefits to public service employees, largely composed of teachers, administrators, and school staff--were earlier showing signs of weakness. The combination of states not keeping up with funding, unrealistic assumptions about investment returns, and increasing retiree lifespans has weakened the system, says Sandi Jacobs, NCTQ state policy director. As primary author of the report "No One Benefits: How teacher pension systems are failing both teachers and taxpayers," Jacobs states further that these factors have led states to implement a number of changes that are costly to districts, teachers, and taxpayers. Only 10 states have pension systems that are adequately funded, the report states. The chronic underfunding nationwide represents legislator hesitancy to take major reform actions, according to Frederick Hess, director of education policy studies at the American Enterprise Institute, a nonpartisan think tank. This article discusses topics stemming from this issue such as defined benefit versus defined contribution plans, underfunded districts, the national picture, vesting and portability, and retirement ages. Policy recommendations are also included.
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Publication Type: Journal Articles; Reports - Descriptive
Education Level: Elementary Secondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Identifiers - Location: Florida; Illinois; Kentucky
Grant or Contract Numbers: N/A