Determinants of the generosity of pension plans for public school teachers, 1982–2006

Abstract

AbstractAll states provide pension plans to their teachers and civil servants; however, these plans vary across the states. We present a history of the development of teacher retirement plans during the twentieth century, describe how teacher plans relate to retirement plans for other state employees, and assess the impact of teachers not being included in Social Security on the benefits they receive from their employer pension plan. Over the past 25 years, public school teacher retirement plans in the United States have increased in generosity as benefit formulas have been increased, salary averaging periods have been reduced, and the normal retirement age has been lowered. We employ data from retirement plans in the states to estimate the impact of social and economic factors on the replacement rates for teachers retiring with 30 years of service.