Published Online: March 25, 2014
Published in Print: March 26, 2014, as Many Teachers Will Forfeit Pension Wealth, Study Says

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Many Teachers Will Forfeit Pension Wealth, Study Says

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Many of the nation's young public school teachers won't be vested in their defined-benefit pension plans or reach the normal age of retirement before they leave the profession—factors that will cost them thousands of dollars in pension wealth, a new analysis concludes.

The report from Bellwether Education Partners, a Washington-based consulting group, contends that states' current defined-benefit pension policies, which pay out according to a fixed formula, are not well aligned with a profession that has grown rapidly younger and more mobile. And that could put teachers at serious financial risk later on in their lives, it says.

The authors used state estimates on teacher-turnover rates to figure out the percentage of newly minted teachers who will earn a pension. Using a median rather than a mean figure to avoid outliers, they concluded that only 45 percent of those teachers will qualify for payouts, a process that typically takes five years. And only 20 percent of the teachers will reach the normal retirement age of 58.

Vol. 33, Issue 26, Page 4

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