K-12 Blues
Pensions Punish Teachers Who Switch Careers

It’s become a cliché that the U.S. labor market, as a whole, is growing more flexible and dynamic. Companies and industries rise and fall at a faster pace, and workers switch jobs and even careers more frequently than their parents did.

But even as private sector workers are rewarded for embracing these new realities, civil servants—and especially teachers—are encouraged to resist them. As Chad Alderman writes in a New York Daily News op-ed, existing public sector pension systems punish teachers who switch careers:

New teachers in New York, as in 14 other states, must stay for 10 years before qualifying for any retirement benefit. That would be illegal in the private sector. […]

Those long waiting periods mean a lot of teachers won’t qualify for a pension from their pension system. In New York City, for example, less than half of new teachers make it to the 10-year mark. They’ll leave with their own contributions and a little bit of interest, but they won’t get any portion of their employer’s contribution. […]

That having been said, there is one group of teachers who do well under the current pension systems. For teachers who stay for 25 or 30 years, the pension plan will finally start to deliver comfortable retirement benefits. About 20% of teachers will teach for their entire careers, and they’ll reap the full rewards of the existing system.

The problem with existing civil service pension system isn’t just that the public can’t afford it; it’s that benefits are distributed inefficiently, lavishly rewarding veteran teachers at the expense of people who teach for shorter stints. Relatedly, much of the funding for these pension systems goes to paying down debt for previous unfunded obligations, suppressing salaries for teachers early in their careers, no matter how successful they are.

While this system benefits unions, its much less clear whether it benefits the students that the education system is supposed to serve. As we’ve said before, “the idea that teaching should be a lifelong career protected and underwritten by unions should be questioned more often.” A teacher corps with higher turnover, that kept new blood running through the system and aggressively promoted capable and enthusiastic professionals, might lead to higher-quality service overall. But so long as teachers unions remain firmly in control of educational policy in many state capitols, we are more likely to see continued blue model retrenchment than forward-looking reform.

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