Pensions Help Deliver Quality Education
There are important policy reasons to continue offering teachers defined benefit (DB) pensions. DB pensions give schools an effective tool to retain high-quality, experienced teachers. These teachers are the most important school-based element that provides positive educational outcomes for our children.
Pension benefits provide teachers an incentive to continue delivering quality education to K-12 students. This incentive becomes all the more important over a teaching career as the erosion of teachers’ wages, when compared to the wages of similar college-educated workers, widens for more experienced teachers.
Because pensions help attract and retain workers, Wyoming can keep skilled teachers in the classroom and empower students to achieve their highest potential. The nationwide teacher shortage is impacting Wyoming, as enrollment in traditional teacher preparation programs has declined by 28% between 2009-2010 and 2017-2018.
Pensions Disproportionately Benefit Rural Areas
Rural counties have the largest percentage of their population receiving a public pension benefit, as 4.3% of residents in rural areas received benefits in 2018. Excluding counties that are home to a state capitol, public pension benefits in rural and small town counties accounted for a larger share of total personal income than in denser metropolitan counties.
Pensions Help to Bridge the Teacher Wage Gap
A national study of K-12 public school teachers' wages identified a 19 percent pay gap relative to comparable private sector workers in 2019. At the same time, teachers' benefits, including pensions, help bridge that gap and allow states to attract and retain highly qualified educators by reducing that overall gap in compensation to 10 percent. In Wyoming, teachers experience a 2.0% wage gap when compared to other college graduates in the workforce.2
Americans understand that teacher pensions play an important role in retaining quality teachers and in offsetting the impact of their lower salaries.
- 83% of Americans say pensions are a good way to recruit and retain qualified teachers.
- 74% of Americans agree that teachers deserve pensions to compensate for lower pay.3
Pensions Reduce Teacher Turnover and Save Money
Experienced teachers are better teachers. DB pensions help to retain highly productive teachers longer, as compared with individual defined contribution (DC) accounts. Moreover, the cost of teacher turnover is quite high, both in terms of financial cost and loss of productivity to the school district.4
- 6.7: Percentage of Wyoming teachers who leave education.
- 58: The number of Wyoming teachers retained each year due to the DB pension
- $306K to $666K: Savings created by the DB system through reduced teacher turnover costs in school districts across Wyoming
-National Institute on Retirement Securty, AARP, NRTA
1 Weller, C. 2017. “Win-Win: Pensions Effectively Serve American Schools and Teachers.“ Washington, DC. National Institute of Retirement Security (NIRS).
2 Allegretto, S. A. and Mishel, L. 2020. “Teacher pay penalty dips but persists in 2019.“ Washington, DC. Economic Policy Institute.
3 Oakley, D. and Kenneally, K. 2019. “Retirement Insecurity 2019: Americans’ Views of the Retirement Crisis.“ Washington, DC. NIRS.
4 Boivie, I. 2017. “Revisiting the Three Rs of Teacher Retirement Systems: Recruitment, Retention, and Retirement.“ Washington, DC. NIRS.