Short Term Teachers And Retirement, Often Not So Short…

I don’t have an “on this date” feature pegged today’s item, but on this date in 1976 Viking 2 landed on Mars. That was, and still is, cool.

Earlier this week Bellwether released a ranking of state teacher retirement plans. As with any good ranking we’re transparent about our assumptions and methods, you can read those in the appendix. Reasonable people can disagree with some of the dimensions we chose, that’s the point of having a ranking. But because retirement is such a long process, saving and then ultimately, hopefully, retiring, we ranked the plans along four profiles – short, medium, and long term teachers and then also taxpayers.

Of these the sort term teachers have attracted the most criticism and confusion, so a few things to keep in mind there.

First, some critics claim we are arguing that short term teachers and long term teachers should be treated the same by state teacher retirement systems. That’s false, obviously, on its face because we have three profiles for teachers that weight different things. Plan dimensions like cost of living adjudgment or Social Security matter differently to short and long term teachers and the ranking reflects that. We do, however, think that good teacher retirement policy treats all teachers equitably. So retirement security for long term teachers – an important policy goal in our view – should not come overwhelmingly at the expense of newer or younger teachers and their ability to save for their retirement.

Second, the whole idea of the short term teacher has been polluted by other education policy debates and is somewhat misleading. Given the large footprint of Teach For America people now casually toss off two years as the definition of the short term teacher. Leave aside that more TFA teachers than not continue teaching after two years, the two and out idea is more generally misleading in the context of teacher retirement policy. In order to vest in a state pension plan it can take 7 or even 10 years of teaching – in one state. Whatever you think about vesting policies, or how long is the ideal tenure for teachers, it’s hard to argue 7, 8, or 9 years really makes one a short termer.

And that points up the third issue. You can actually teach for quite a while and not vest anywhere. If life happens to take you to a few different states you can teach for 20 years and not vest – again because it can take 7 or 10 years in many places. Chad Aldeman and I looked at that whole issue more in Friends Without Benefits a few years ago. This problem is compounded by the about 40 percent of teachers who do not participate in Social Security – not by their choice but because of state policy. That’s an issue that doesn’t get the attention it should given how much it matters to people’s lives.

I don’t think it makes sense to engineer a retirement system around people who teach for just a few years. But it also doesn’t make sense to engineer it exclusively around the one in five who teach for a full career – a figure that seems unlikely to rise given the future labor market. It seems like trying to have policies that do not unduly burden either group in their retirement saving efforts is a good starting point for reform or policy (and as a reminder today’s pensions for long term teachers are not “gold plated.”

Along those lines, one of the things about our rankings that is worth pausing on is that the top performing states are a mix of approaches to this problem – and also have different political contexts. It seems to indicate, perhaps, that pragmatism about the question of how best to provide retirement support for teachers is a better approach than strict ideology about any approach – traditional pensions or 401(k)s axiomatically being the ideal approach. As the rankings show, the details matter and while there will always be tradeoffs in any policy, the details are where we can dull some of today’s sharp edges.

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