In this brief, we examine an important but obscure form of state spending on K-12 education-state subsidies of school district pension costs. In 2018, this exceeded $19 billion across 23 states. To put that amount into perspective, 2018 federal spending on Title I programs was $15.8 billion. This revenue stream is often ignored in analyses of…

When policy advocates debate how best to ensure equity in public education funding, the topic of teacher pension reform rarely comes up. But, in fact, pensions represent a very large and fast-growing source of education spending, much of it distributed in ways that are, in a number of states, anything but equitable. When states subsidize teacher…

The value of pension benefits varies widely, by a teacher's age of entry and exit. This variation is masked by the uniform rate of annual contributions, as a percent of pay, to fund benefits for all. For the first time, we unmask that variation by calculating annual costs at the individual level. In California, we find that the value of a…

While it is generally understood that defined benefit pension systems concentrate benefits on career teachers and impose costs on mobile teachers, there has been very little analysis of the magnitude of these effects. The authors develop a measure of implicit redistribution of pension wealth among teachers at varying ages of separation. Compared…

The authors analyze the Arkansas teacher pension plan and empirically gauge the behavioral response to incentives embedded in that plan and to possible reforms. The pattern of pension wealth accrual creates sharp incentives to work until eligible for early or normal retirement, often in one's early fifties, and to separate shortly thereafter. We…

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…

This policy brief summarizes findings presented at a February 2009 research conference on teacher retirement systems hosted by the National Center on Performance Incentives (NCPI) at Vanderbilt University's Peabody College. The 2009 conference was the second in a series of NCPI events focusing on findings from recent research on issues related to…

In response to a journalist inquiry regarding research on funding of Ohio's teacher retirement system and its effect on school district finances, this analysis by the Thomas B. Fordham Institute points to serious questions and profound concerns about the health of Ohio's teacher pension system, and that similar time bombs may be ticking in other…

Pensions have long been an important part of compensation for teachers in public schools. However, the incentive structures of teacher pension systems are not widely understood, even though they can have powerful effects on the composition of the teaching force and on public finance. In their research, the authors have found that teacher pension…