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Reforms Have Overlooked Teacher Retirement, Report Says

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Despite all of the emphasis on education reform during the past decade, the retirement of an aging teacher corps has been substantially overlooked--a failure that could inhibit school improvement, a study by the Educational Resources Information Center clearinghouse on management suggests.

"The reform agenda largely ignored the need to consider means for retiring and replacing an increasing number of teachers and administrators,'' write the study's authors, Frank V. Auriemma, Bruce S. Cooper, and Stuart C. Smith.

"It also failed to foresee the pressure on states and localities to cut personnel costs by building incentive systems for early retirement,'' they write in the report, "Graying Teachers, A Report on State Pension Systems and School District Early Retirement Incentives.''

Described as the first study to pull together disparate pieces of the retirement puzzle, the 92-page report published this month offers an overview of the aging teacher workforce throughout the United States, current state pension plans, and the relatively recent introduction of early-retirement-incentive programs.

In a feature unusual for an ERIC publication, the authors also include recommendations for improving teacher-retirement systems, beginning with the creation of a national commission and parallel committees in each state to examine the issues associated with teacher retirement and replacement.

Moreover, they suggest that states incorporate some of the traits of private pension plans into the public ones in order to gain flexibility and give teachers some control over their future.

Other recommendations include equalizing pension compensation statewide and making pensions portable between states.

Key Human-Resource Problem

Within the next decade, nearly one million teachers will reach retirement age, according to the authors, who note that retirement and replacement "may rank as the key human-resource problem of the 1990's.''

But in recent years, school districts and state governments, which generally foot all or part of the employer's cost of pension plans, have encountered financial shortfalls.

Consequently, in the past few years, the study notes, districts have begun devising incentive plans in the hope that veteran teachers with high salaries will opt for early retirement. Not only will districts save money under these plans, the authors maintain, they also can retain or recruit a fresh generation of teachers to promote reform.

But, "an effective, carefully designed retirement plan can save a school district money, make for smooth transitions, and revive school programs,'' the authors say. "Conversely, a poorly designed program may misfire, costing large sums of money, failing to get teachers to retire, landing the district in court in violation of antidiscrimination law, and even making teacher replacement difficult.''

The researchers discuss various incentive options and include case studies of early-retirement incentives in six somewhat similar districts in the Northeast.

In those cases, for example, the researchers found that the district with the highest cost-effectiveness quotient offered a flat cash payout to early retirees, while another district lost money by paying retirees for an unlimited amount of accumulated sick days.

The authors also suggest that districts and state governments--and to some extent the federal government--coordinate their retirement policies to avoid conflicts that result in financial penalties for teachers electing to take early retirement.

For example, a bonus amounting to $32,890 paid by a district in New Hampshire would be erased in five years because the state cuts retirees' benefits by 6 percent a year for every year they retire before the age of 62.

Copies of the report can be ordered from Publication Sales, ERIC Clearinghouse on Educational Management, 1787 Agate St., Eugene, Ore. 97403; the cost is $10.50 each plus $3 postage and handling for billed orders, payable to the University of Oregon/ERIC.

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