Friends without Benefits: How States Systematically Shortchange Teachers' Retirement and Threaten Their Retirement Security

Americans are often reminded that it's never too soon to start saving for retirement. Many of the nation's public school teachers are doing just that -- buying into their state pension system with plans to retire comfortably. However, this new study estimates that nearly 50 percent of all public school teachers will not qualify for even a minimal pension benefit, and less than 20 percent will stay in the profession long enough to earn a normal retirement benefit.This Joyce-funded report demonstrates the consequences of poorly structured state and city policies that can exacerbate retirement insecurity for our nation's teachers. For example, an individual teacher could forfeit up to 6.5 percent of her annual salary for one year, or, due to compound interest, 22.6 percent of her annual salary after three years according to Bellwether's analysis. To put these penalties in dollar terms, a hypothetical teacher earning $40,000 a year could face a savings penalty of $2,601 for teaching only one year and $9,035 if she left after three years. This money stays with the pension funds and is used to supplement the pensions of the remaining teachers.Tackling the pension system is critical for reducing teacher turnover and retaining the profession's most talented educators. Several policy solutions are offered