Blog: The Educated Reporter

Beyond the Rising Costs of Teacher Pensions

(Flickr/Christa Lohman)

Reporters are sometimes afraid of numbers. But when it comes to pensions, this can be a problem. It means that they often write an incomplete story,  giving voices to politicians who decry the size of teacher pensions. Or they’ll ignore pension stories entirely.

So it’s no surprise that the public often comes to erroneous conclusions—that teacher greed is the problem.

“I’ve worked in six states,” said Diane Rado, who covers pensions for the Chicago Tribune, and moderated a conversation on the issue at EWA’s recent National Seminar. “And nobody complains more than in Illinois about how much teachers make and what their pensions are.”

But two experts on pension policy—“If we were in a trial, we would stipulate these guys are experts,” according to Rado—said in many states the problem is politicians who borrow pension money now and then complain about pension size years later.

“It’s not the benefit that is the driver of the problem,” said Ralph Martire, executive director of the nonpartisan Center for Tax and Budget Accountability, who has studied the problem extensively. “It is the irresponsible actions of our elected officials. Are our elected officials going to say this? No. They’re going to talk about irresponsible pensions.”

Illinois, for example, will have to start paying almost $7 billion to start meeting its pension obligations, but much of that is going to pay off the debt that previous politicians accrued, according to the experts. Instead of paying into the pension, payments were deferred.

“Politicians love that,” Martire told the EWA audience in Chicago. “Because you pay very little now and someone down the road has to pay a lot.” So if journalists aren’t watching out, politicians have every incentive to try to push the cost of pensions onto future politicians.

Cook County is at the bottom of the country for how much money taxpayers are going to have to come up with. Most states have not been spending enough on pensions to some degree or another—only South Dakota doesn’t have an “unfunded liability” of some size.

But not every state operates under the same laws. Illinois has strong protections built into its constitution, so teacher pensions have a much greater chance of being paid out, when the bills come due, than in a state like Texas, which has no constitutional protections.  

Some states enroll teachers into Social Security as well as their state pension plans. But many states do not: 40 percent of teachers are not covered by Social Security, according to Martire. Federal law requires that states contribute to pensions an amount at least as large as Social Security. But in the coming years, as some states try to decrease their pension costs, those states will no longer be in compliance with the law.

This will cost billions of dollars to fix, or force states to adopt Social Security alongside their pensions, “But nobody is talking about this,” according to Martire.

In some states, reporters can file Freedom of Information requests for every retiree’s pension amount, which can generate a bunch of easy stories, according to Rado. It can lead to stories on who receives the largest pensions and who is double-dipping in two different state systems.

It can also help them write about the conflict between the generations as younger workers are put on significantly less lucrative pension plans. (The new pension plans are usually referred to as Tier II as opposed to Tier I plans for older teachers.) In Illinois, young teachers are actually paying more than they can expect to receive in benefits to support older teachers, according to Chad Aldeman, of Bellwether Education Partners.

Taxpayers in the past were essentially borrowing current teacher pension money to pay for increased services then, but sometimes now young teachers are being forced to foot the bill, Martire noted.

“I talk to young teachers who are like I don’t want to be in this profession anymore,” Rado added.

Although these pension stories can feel far removed from children in the classroom, the security of a comfortable pension is a significant reason many teachers are willing to work for, the pension experts said, which is significantly less money than teachers in other industrialized countries.

Aldeman shared some ideas for stories at the EWA session:

  • Write about the impact of decreasing pension sizes on teachers’ lives and performance.
  • Find out where your state is investing its pension money and how much it’s paying in fees to manage all the money.
  • Are changing pensions affecting recruitment and retention of teachers?
  • Use the pension data to do stories on teacher retention: Pension databases will have information on teacher tenure with many years of data.
  • Show why it matters: Millions of teachers make up one of the largest professions in the country, more than other professions such as nurses, lawyers, doctors and social workers.
  • Averages may be misleading: Some teachers may get higher pensions while many more have lower ones. Or the data can be skewed by including administrator pensions.
  • Who are the pension winners and losers? Some teachers pay in but never get anything if they quit too soon.
  • Generational divide: Nearly all states have adopted worse pensions for younger teachers. What will this mean?
  • Compare pensions among traditional and charter schools, new and old teachers, urban vs suburban teachers

“The bottom line is that teachers are the lowest paid profession in the U.S. based on the amount of credentialing required,” Martire said. “Every high performing nation has teaching as its highest or second highest paid profession. The RAND Corporation estimated that the cost to get teaching to a competitive level is $50 billion. That’s a big number but it’s a rounding error compared to the total size of the federal budget.”