A
new study analyzing the effectiveness of defined benefit (DB) pensions
on teacher retention and productivity finds that pensions play a
critical role in recruiting and retaining productive teachers.
This increases each school’s level of effectiveness, thereby benefiting
students. Additionally, DB pensions save school districts money by
reducing expensive teacher turnover costs. More specifically, the new
study, Three Rs of Teacher Pension Plans: Recruitment, Retention, and
Retirement, finds that:
- Teacher effectiveness increases with experience. Education policy
literature finds that teacher productivity increases sharply within the
first few years of teaching. Thus, the more retention that among mid-
career teachers, the more that the average teacher productivity within a
school will increase.
- The cost of teacher turnover is quite high, both in terms of
financial cost and loss of productivity to the school district.
Additionally, public school teachers turn over less than private school
teachers, largely due to their compensation, including pension benefits.
- DB pension plans help to recruit high quality teachers, and to
retain highly productive teachers longer, as compared with defined
contribution (DC) individual retirement accounts.
- In 2003, DB pensions helped to retain an additional 22,000 teachers
nationwide. Because longer tenured teachers are more effective
teachers, the increased retention that DB pensions bring increases the
overall quality of public education.
- Because the cost of teacher turnover is substantial, the retention
effects of DB pension plans also save school districts money. In 2003,
DB pensions saved school districts $273.2 million nationally in teacher
turnover costs.
The study provides state-specific data including teacher turnover cost
savings associated with pensions.
Culled from National Institute on Retirement Security
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