Title

Examining Inequities in Teacher Pension Benefits

Document Type

Article

Publication Date

12-1-2015

Keywords

public pensions, defined benefit plans, teacher pensions, education, Missouri

Abstract

From funding to teacher quality, inequities exist between school districts. This paper adds to the literature on inequities by examining the impact of pension plan formulas on pension benefits. Using data from the salary schedules of 464 Missouri school districts, this paper analyzes how various final average salary calculations would impact the benefits of teachers in different districts. All of the schools in this analysis belong to Missouri’s Public Employee Retirement System, which is a defined-benefit pension plan. A teacher’s benefit in this plan is based on her years of experience and her final average salary. The system uses a three-year final average salary calculation. This captures salaries when they are most inequitable, at the end of the schedule. When more years of service are used in the final average salary calculation, inequities in benefits are reduced, but not eliminated.

Comments

EDRE Working Paper 2016-02

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