Report Roundup
Teacher Pensions
"Underfunded Teacher Pension Plans: It's Worse Than You Think"
Teachers’ pension plans are underfunded by $933 billion, according to an analysis released by the Manhattan Institute and the Foundation for Educational Choice.
According to the paper, that’s close to three times more than official state government estimates of these defined-benefit plans’ liabilities.
The authors attribute the gap to accounting rules for public pensions that permit actuaries to “discount” future obligations based on estimates of how the investments will fare over time. Unlike private-sector plans, public-pension plans aren’t required to take into account how risky those investments are and generally assume strong stock performance.
If the market doesn’t perform as desired, states will have to meet the gap between projections and actual benefit costs by raising taxes or scaling back other education services to meet pension obligations.
The report adjusts the calculations of teacher-pension plans present liabilities by using private-sector discount rates. It also adjusts them based on the market value of current investments to reflect the last few years of economic downturn.
Vol. 29, Issue 29, Page 5
Access selected articles, e-newsletters and more!
Viewed
Emailed
Recommended
Commented
Sponsored Whitepapers
• Best Practices in Information Management, Reporting and Analytics for Education
- Instructional Leadership Director
- ALBANY CITY SCHOOL DISTRICT, Albany, NY
- Train Brilliant Math Students
- Art of Problem Solving, San Diego, CA
- Principal - Chicago Metro Area West
- The Menta Group, Hillside, IL
- Chief Innovation Officer
- The International Society for Technology in Education (ISTE®), Washington, DC
- Common Core Literacy Assessment Developer - Part Time
- The Equity Project (TEP) Charter School, New York, NY



We encourage lively debate, but please be respectful of others. Profanity and personal attacks are prohibited. By commenting, you are agreeing to abide by our user agreement.
All comments are public.