"But the Pension Fund Was Just Sitting There"
The Politics of Teacher Retirement Plans

For those who believe it is morally incumbent upon each generation to confront its challenges and not palm them off on the next generation, this has been a tough year and a tougher decade. From the Medicare drug benefit to the stimulus package, from bailing out Freddie and Fannie to auto industry "relief," elected officials have ladled out sweeteners and stopgap measures funded by trillions of borrowed dollars. The tendency to dress these measures up as "investments" is even more disheartening, as we burden our children with staggering liabilities and avoid the consequences of our own lax discipline.

There may be no place where this tension is as stark as when it comes to teacher benefits and pensions in K-12 schools. There, public officials make expensive promises to influential adult constituencies, saddling our kids with enormous new obligations that will do little to improve teaching and learning. Before the market meltdown last fall, state pension systems were already more than $730 billion in the red. Moreover, teacher pensions--with their industrial-era inflexibility, emphasis on time served, and lack of portability--are ill-designed for attracting and retaining talented teachers in today's labor market. The result is a system that increasingly funnels K-12 dollars toward generous benefits while impeding efforts to boost teacher quality. Typically, when discussed at all, pension reform is understood as a fiscal challenge.

In this paper, my colleague Juliet Squire and I argue that the two central challenges of pensionreform are political. Underfunding is a product of an organized, influential constituency (teachers and public employees) demanding benefits from state policymakers who can grant future benefits without making offsetting cuts or raising taxes. Though this dynamic can alter when fiscal distress becomes stark enough, even this thin silver lining doesn't offer much hope for pushing policymakers to revisit the anachronistic structure of the benefits. We suggest some institutional reforms that might help tame irresponsible behavior, but we are not optimistic.

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Frederick M. Hess is a resident scholar and director of education policy studies at AEI. Juliet P. Squire is a research associate at AEI.

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About the Author

 

Frederick M.
Hess
  • An educator, political scientist and author, Frederick M. Hess studies K-12 and higher education issues. His books include "Cage-Busting Leadership," "Breakthrough Leadership in the Digital Age," "The Same Thing Over and Over," "Education Unbound," "Common Sense School Reform," "Revolution at the Margins," and "Spinning Wheels." He is also the author of the popular Education Week blog, "Rick Hess Straight Up." Hess's work has appeared in scholarly and popular outlets such as Teachers College Record, Harvard Education Review, Social Science Quarterly, Urban Affairs Review, American Politics Quarterly, The Chronicle of Higher Education, Phi Delta Kappan, Educational Leadership, U.S. News & World Report, National Affairs, the Washington Post, the New York Times, The Wall Street Journal, the Atlantic and National Review. He has edited widely cited volumes on the Common Core, the role of for-profits in education, education philanthropy, school costs and productivity, the impact of education research, and No Child Left Behind.  Hess serves as executive editor of Education Next, as lead faculty member for the Rice Education Entrepreneurship Program, and on the review boards for the Broad Prize in Urban Education and the Broad Prize for Public Charter Schools. He also serves on the boards of directors of the National Association of Charter School Authorizers and 4.0 SCHOOLS. A former high school social studies teacher, he teaches or has taught at the University of Virginia, the University of Pennsylvania, Georgetown University, Rice University and Harvard University. He holds an M.A. and Ph.D. in Government, as well as an M.Ed. in Teaching and Curriculum, from Harvard University.


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