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ERIC Number: EJ1149676
Record Type: Journal
Publication Date: 2017
Pages: 9
Abstractor: As Provided
ISSN: ISSN-0013-189X
How Pensions Contribute to the Premium Paid to Experienced Public School Teachers
McGee, Joshua B.; Winters, Marcus A.
Educational Researcher, v46 n5 p250-258 Jun-Jul 2017
Many argue that public school systems should stop linking teachers' salaries so closely to their years of experience. However, the effect of deferred retirement compensation on the premium paid to experienced teachers has, to date, been underappreciated. To shed more light on this issue, we calculate the total compensation earned by teachers in New York City and Philadelphia from both salary and deferred retirement compensation under each system's currently operating defined-benefit plan. Retirement compensation in both cities is back-loaded, which substantially increases the premium paid to highly experienced teachers. In late-career years, teachers often earn a larger compensation premium from the accrual of pension benefits than from salary. We show that cash-balance retirement plans, which are less back-loaded, would substantially reduce experience premiums without reducing the total compensation for the average entering teacher.
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Publication Type: Journal Articles; Reports - Research
Education Level: N/A
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
Identifiers - Location: New York (New York); Pennsylvania (Philadelphia)
Grant or Contract Numbers: N/A