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As states and school districts continue to adjust to educating during a pandemic, one of many things is on the back burner: teacher pensions.
Responding to covid costs schools money, from buying protective equipment to securing mobile hotspots to increase students’ access to virtual learning. With potential budget shortfalls and more pressing spending demands, some states are finding savings in long-underfunded teacher pension programs.
Teacher pensions in most states require educators to contribute part of their pay into the system to receive benefits. Pension costs have risen for decades, and coming into the pandemic, most states had already scaled back retirement benefits for teachers or forced them to contribute more, leaving new educators with less generous plans.
In Kentucky, one of 10 states where teachers aren’t eligible to receive retirement benefits from Social Security, a bill would require new teachers to contribute more and work longer to receive benefits. Vermont State Treasurer Beth Pearce has recommended ending cost-of-living increases for teacher benefits, as well as requiring teachers to pay more into the system and work longer to be eligible for the pension program.
Most pension programs for teachers lack the contributions needed to cover their costs to provide benefits to retirees. By 2018, state pension plans, including those for teachers, were underfunded by about 30%, according to a Pew Charitable Trusts analysis.
“It’s very easy to underpay in the short term, hoping that in the long term, you’ll be able to make it up,” said Josh McGee, a University of Arkansas research assistant professor focused on pensions. “And there’s no clear constituency that really advocates for full payment, because the teachers themselves would like to have full contributions, but they also care a lot about making sure that their salary costs are fully met, that they have good health care benefits, that their job conditions are good, and arguably they care more about those things than they do necessarily about retirement benefits.”
That presents a fundamental challenge, Mcgee said: “How on earth do you prioritize a long-term promise with no vocal constituency and not let these systems simply either tread water or slowly dwindle over time?”
These conflicting priorities – salary improvements and a fully-funded retirement system – are at odds in Pittsburgh, Pennsylvania, where teachers in the Keystone Oaks School District went on strike for more than a week during contract negotiations this month. The Keystone Oaks Education Association, a teachers’ union, opposed the district’s proposed six-month pay freeze, which union president Kevin Gallagher argued could be avoided by tapping into the district’s nearly $6 million surplus.
A spokesperson for the district didn’t return a call seeking comment, but the district’s board president, Theresa Lydon, previously told the Pittsburgh Post-Gazette that about half of that figure is reserved for employee benefits, including pensions.
Gallagher said that new teachers pay more into retirement than they used to, but overall, the system is “A-OK.” Ensuring teachers continue to move up the pay scale is a far more urgent concern for the union.
But for retirees, the issue of declining benefits is more tangible. Pensions are a huge issue for members of the Ohio Retired Teachers Association, Executive Director Robin Rayfield said.
Ohio’s teacher retirement system eliminated retirees’ cost-of-living increases four years ago. The pension program is about 75% funded, and in recent years, teachers have contributed more and worked longer before they could retire.
The issue came to a head, Rayfield said, when he learned in the fall that the pension program didn’t meet its goals for investment growth, but retirement system employees continued to receive bonuses. According to minutes for the retirement system board, by the end of November, workers had received about $7.3 million in incentive pay for the year.
The Ohio Retired Teachers Association raised $75,000 from members, local chapters and the Ohio Federation of Teachers to hire an attorney to conduct a forensic audit of the state’s teacher pension system, which will include an analysis of the program’s business practices and employee bonuses.
Rayfield admits the money spent on bonuses wouldn’t be enough to cover a cost-of-living increase. “But,” he said, “When we’re in these dire times, as we call them, shouldn’t there be shared sacrifice? If the (active teachers) are paying more, getting less, and retirees aren’t getting what they were promised, why aren’t we all in this boat together, paddling in the same direction?”
Contact Big If True editor Mollie Bryant at 405-990-0988 or bryant@bigiftrue.org. Follow her on Facebook and Twitter.
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