School & District Management

Charter School Pension Plans Vary Widely, Study Shows

By Stephen Sawchuk — June 22, 2011 1 min read
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Pension plans for teachers in charter schools vary widely, ranging from the state defined-benefit plans set up for traditional public school teachers, to the defined-contribution, match-type plans used in other fields, to nothing at all, a new analysis finds.

The first-of-its-kind analysis, released this morning by the Washington-based Thomas B. Fordham Institute, examines data from Arizona, California, Florida, Louisiana, Michigan, and New York. Those states allow charter schools to choose whether to participate in a state pension plan. There are actually 16 such states, but the report’s authors, Michael J. Podgursky of the University of Missouri-Columbia and Amanda Olberg, a Fordham Institute research assistant, picked those six because they contain about three-quarters of the schools eligible for the study.

Using federal data, as well as data held by the National Alliance for Public Charter Schools, the researchers examined levels of participation in the state plans. Then, they took a random, 20 percent sample of those schools that chose not to use the state plan, and surveyed the schools to see if they offered an alternative.

Among the findings:

• Participation in a state pension plan differed by type, with stand-alone charter schools more likely to use the state system than those run by nonprofit charter-management organizations or by for-profit education management organizations.

•Levels of school participation in a state plan ranged from 90 percent or more in California, to less than a quarter of charters in Arizona.

•14 percent of the schools not participating in a state plan offered no alternative retirement plan, while 9 percent offered a plan with no employer contribution.

• 77 percent of the sample offered a pension plan containing an employer contribution, with a majority favoring a dollar-for-dollar match, and the others favoring another type of matching process.

The report’s authors draw no conclusions about what these findings actually mean for the field, but they suggest that future research could offer lessons and insights about how pensions might be structured.

A version of this news article first appeared in the Teacher Beat blog.