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ERIC Number: EJ849855
Record Type: Journal
Publication Date: 2009
Pages: 37
Abstractor: As Provided
Reference Count: 0
ISBN: N/A
ISSN: ISSN-1557-3060
Peaks, Cliffs, and Valleys: The Peculiar Incentives in Teacher Retirement Systems and Their Consequences for School Staffing
Costrell, Robert M.; Podgursky, Michael
Education Finance and Policy, v4 n2 p175-211 Spr 2009
This article examines the pattern of incentives for work versus retirement in six state teacher pension systems. We do this by examining the annual accrual of pension wealth from an additional year of work over a teacher's career. Accrual of wealth is highly nonlinear and heavily loaded at arbitrary years that would normally be considered mid-career. One typical pattern exhibits low accrual in early years, accelerating in the mid- to late fifties, followed by dramatic decline or even negative returns in years that are relatively young for retirement. Key factors in the defined benefit formulas that drive such patterns are identified along with likely consequences for employee behavior. The authors examine efficiency and equity consequences of these systems as well as options for reform.
MIT Press. 238 Main Street Suite 500, Cambridge, MA 02142. Tel: 617-253-2889; Fax: 617-577-1545; e-mail: journals-rights@mit.edu; Web site: http://www.mitpressjournals.org/loi/edfp
Publication Type: Journal Articles; Reports - Research
Education Level: Elementary Secondary Education
Audience: N/A
Language: English
Sponsor: N/A
Authoring Institution: N/A
IES Cited: ED529806