Teachers

California's Jerry Brown is getting ready to propose what the AP calls "sweeping rollbacks" in public-sector pensions, raising the retirement age for non-public safety employees to 67, ending abuses like spiking and "air time," and mandating a hybrid system that has a traditional pension component and an added 401(k)-style defined-contribution plan.

Based on the Sacramento Bee's description of the plan, the change to a hybrid plan is far less radical than it needs to be to improve mobility of benefits for young workers (teachers included). The new system would still provide 2/3 of projected retirement income out of a defined-benefit plan workers would only earn after a full, multi-decade career in public service. It's also hard not to wonder how deeply Gov. Brown believes in this plan, since he pitched a much less serious reform in the spring that failed due to Republican opposition.

It's a better start to the reform process in California than that earlier plan, however. If Brown sticks to his guns against his union backers and gets these reforms through the legislature, it would be a positive first step in fixing the state's broken system of public employee compensation. Our latest report,...

Amber Winkler, Fordham's VP for Research, is currently traveling China as a Senior Fellow with the Global Education Policy Fellowship Program (GEPFP). She'll be passing along her observations on education in the People's Republic with periodic ?Postcards from China.?

Another city (hospitable Xi'an) and another tour guide. These young people are proving to be a valuable source of information. I chat with Florence, our twenty-something guide, after lunch at the Terracotta Warriors Museum (wow!). Florence is planning to become a teacher and appeared to appreciate my interest in her desired profession. I'd read in the course of my research on Chinese education that high school teachers were ranked according to how many of their students were accepted into prestigious universities. True? Absolutely she said. Further, a teacher's standing could be improved if his/her students placed in one of several academic national competitions held in China annually. These accolades can accumulate over time such that some "basic school" teachers can have similar standing as university professors if they choose later to go into higher education. It was unclear if these accolades took the form of numerical published...

This is the fourth in a series of blog posts introducing Fordham’s latest report, Halting a Runaway Train: Reforming Teacher Pensions for the 21st Century.

America’s public employee pensions are unsustainable. Left untouched, the spectacularly underfunded existing system may not only deprive workers of their retirement benefits, it could devastate the broader economy as organizations choose between defaulting on their promises or diverting enormous sums from other programs to pay for pensions. Yet while few question the seriousness of the situation, too few organizations have acted to fix it. Halting a Runaway Train: Reforming Teacher Pensions for the 21st Century not only profiles the groups that have led the way towards sustainable reform, its authors offer at least three lessons for workers, policymakers, and taxpayers.

  • “First, this is messy, complicated work, fraught with challenges. Yet smart organizations can prepare for them.” By presenting the need for reform to employees using hard data and communicating with stakeholders throughout the process, organizations make pension overhauls smoother and more inclusive.
  • “Second, cost savings from pension reform may be real but not immediate.” In the short-term, shifts away from defined-benefit (DB) plans mean new employees won’t subsidize the
  • ...

This is the fourth in a series of blog posts introducing Fordham's latest report, Halting a Runaway Train: Reforming Teacher Pensions for the 21st Century.

America's public employee pensions are unsustainable. Left untouched, the spectacularly underfunded existing system may not only deprive workers of their retirement benefits, it could devastate the broader economy as organizations choose between defaulting on their promises or diverting enormous sums from other programs to pay for pensions. Yet while few question the seriousness of the situation, too few organizations have acted to fix it. Halting a Runaway Train: Reforming Teacher Pensions for the 21st Century not only profiles the groups that have led the way towards sustainable reform, its authors offer at least three lessons for workers, policymakers, and taxpayers.

  • ?First, this is messy, complicated work, fraught with challenges. Yet smart organizations can prepare for them.? By presenting the need for reform to employees using hard data and communicating with stakeholders throughout the process, organizations make pension overhauls smoother and more inclusive.

  • ?Second, cost savings from pension reform may be real but not immediate.? In the short-term, shifts away from
  • ...

This is the third in a series of blog posts introducing Fordham's latest report, Halting a Runaway Train: Reforming Teacher Pensions for the 21st Century.

The financial crisis brought increased urgency to solving the pension crunch, but few groups in K-12 public education have found relief. As Michael B.Lafferty notes in Halting a Runaway Train,

?while the market crash caused much hand-wringing, it has, to date, brought about little fundamental change in the public-pension sector. A number of states took action to increase contributions to their pension plans, raise the retirement age, and/or fiddle with benefit formulas, but these actions merely nibbled around the edges of a gigantic problem.

But while examples of organizations that manage teacher retirement benefits finding solutions are rare, they are real. In particular, Halting a Runaway Train looks to creative states and charter schools that have made meaningful, if sometimes rocky, transitions away from defined-benefit (DB) retirement plans.

The Last Frontier changes first. While states like Nebraska and Michigan have cut back on DB plans for most public workers, legislatures have proven hesitant to extend those limits to teachers. Alaska, however,...

This national survey of education school professors finds that, even as the U.S. grows more practical and demanding when it comes to K-12 education, most of the professoriate simply isn't there. They see themselves more as philosophers and agents of social change, not as master craftsmen sharing tradecraft. They also resist some promising reforms such as tying teacher pay to student test scores. Still, education professors are reform-minded in some areas, including tougher policies for awarding tenure to teachers and financial incentives for those who teach in tough neighborhoods. Read on to find out more.

Press Release

 

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This is the second in a series of blog posts introducing Fordham's latest report, Halting a Runaway Train: Reforming Teacher Pensions for the 21st Century.

So where should leaders and policymakers go for examples of how to fix teacher pensions? And what exactly does successful pension reform look like? It turns out that some of the most instructive examples don't involve K-12 education at all, as author Michael B. Lafferty looks to the likes of IBM, the federal government, and the University of Missouri for answers.

The feds lead the way. While 80 percent of state and local workers participate in defined-benefit (DB) retirement plans, the largest government in America shifted away from the DB model a quarter century ago. During the Reagan years, the feds began enrolling all new hires in plans that combined the DB and defined-contribution (DC) models, while allowing existing employees to transfer as well. Not always known for its forward-thinking, the federal government actually offers an early blueprint for public-sector pension reform and a primer on making the most of a bleak fiscal situation to drive needed change.

IBM: Lessons...

When it comes to public-sector pensions, writes lead author Michael B. Lafferty in this report, “A major public-policy (and public-finance) problem has been defined and measured, debated and deliberated, but not yet solved. Except where it has been.” As recounted in Halting a Runaway Train: Reforming Teacher Pensions for the 21st Century, these exceptions turn out to be revealing—and encouraging. As leaders around the country struggle to overhaul America’s controversial and precarious public-sector pensions, this study draws on examples from diverse fields to provide a primer on successful pension reform. Download to find valuable lessons for policymakers, workers, and taxpayers looking for timely solutions to a dire problem.

This is the first in a series of posts that will introduce the Fordham Institute's newest publication, Halting a Runaway Train: Reforming Teacher Pensions for the 21st Century. Today's entry outlines the seriousness of the teacher pension crisis; check back over the coming days for a peek at the examples and lessons the report provides.

Public employee pensions, like those enjoyed by the vast majority public school teachers, are intended as a form of individual financial security: compensation each employee earns through decades of service. Today, however, they represent a grave and deepening threat to the nation's economy.

In 2010, the Pew Center on the States found a $1 trillion gap between the retirement benefits states promised and the funds allocated to pay for them as of 2008. A year later, the financial crisis had pushed the tab up another 26 percent.

The effects of this liability are already popping up: when Standard & Poor dropped New Jersey's credit rating in February, the first explanation given was ?concern regarding the stresses from the state's poorly funded pension system.? Such...

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