According to analysis by Bellwether Education Partners, the rising costs of teacher pensions are eating into teacher salaries.
Teachers, and their unions, often complain about low teacher salaries. The research from Bellwether shows that, since 1994, teacher salaries have failed to keep pace with inflation. But total compensation for teachers has risen slightly faster than inflation when non-salary benefits like insurance and retirement are included.
Chad Aldeman, an associate partner at Bellwether, says lack of money isn't why teacher salaries aren't rising. "Even after adjusting for inflation and rising student enrollment, total school spending is up," Aldeman writes. "It's not for lack of money spent on teachers, either. Districts are allocating about the same portion of their budgets to instructional costs — including salaries, wages, and benefits for teachers — as they did 20 years ago."
Aldeman also shows that teachers have the highest retirement costs of almost any profession. "While the average civilian employee receives $1.78 for retirement benefits per hour of work, public school teachers receive $6.22 per hour in retirement compensation. As a percentage of their total compensation package, teacher retirement benefits eat up twice as much as other workers (10.3 versus 5.3 percent)," Aldeman says.
Much of the increase in teacher pension costs has to do with debt. "Unfortunately for teachers, the rising costs of their retirement systems do not reflect improved benefits, it's primarily a function of debt," Aldeman says, blaming the widespread prevalence of defined benefit pension plans for teachers. Those plans base retirement benefits on a formula, not on how much a teacher has contributed to the plan. About 90 percent of public school teachers are in such plans. "For every $10 states and districts contribute to teacher pension plans, $7 goes toward paying down past pension debt, and only $3 goes toward benefits for current teachers."
Jason Russell is a commentary writer for the Washington Examiner.