ERIC Number: EJ875791
Record Type: Journal
Publication Date: 2010-Jan
Reference Count: N/A
Will Pensions Bankrupt Your District?
District Administration, v46 n1 p39-42 Jan 2010
The financial state of the nation's public pension funds--which provide the retirement incomes for all state employees but in most states are dominated by teachers, administrators, and other school employees--has gone from bad to worse, and is projected to continue to worsen in coming decades. A perfect storm of factors has combined in the past year. Long-term trends of insufficient state funding, ever-increasing payment obligations, and retirees living longer than ever, coupled with the market crash at the end of 2008, have put most teacher retirement funds on a path to financial disaster. While the market crash accelerated the problem, many states' retirement programs were in trouble well before 2008. Union skepticism notwithstanding, proposed solutions to the crisis are moving forward and vary by state, but in most, the proposals are going to cost districts. The Ohio pension system has recently proposed a number of reforms, including raising the contribution rates for school districts from 14 percent to 16.5 percent of payroll over five years beginning in 2016, and capping the number of years of pension payments at 33.4 years. Similarly, Oregon is considering a significant increase in employer contributions after the state fund lost $17 billion in the 2008 market crash, possibly doubling school district payments to 25 percent of payroll in the next five years, or even higher, depending on stock market returns.
Descriptors: Teacher Retirement, Retirement Benefits, Educational Finance, Trend Analysis, Debt (Financial), Educational Administration, Educational Planning, Expenditures, Financial Needs, School Districts, Financial Problems, Fiscal Capacity, Politics of Education, Time Perspective
Professional Media Group, LLC. 488 Main Avenue, Norwalk, CT 06851. Tel: 203-663-0100; Fax: 203-663-0149; Web site: http://www.districtadministration.com
Publication Type: Journal Articles; Reports - Descriptive
Education Level: Elementary Secondary Education
Authoring Institution: N/A
Identifiers - Location: Alaska; Colorado; District of Columbia; Indiana; Louisiana; Michigan; New Jersey; Ohio; Oregon; Vermont